FHA Changes

There are a lot of them along with many more that will follow.  On Friday “Federal Housing Administration (FHA) Commissioner David H. Stevens today announced plans to implement a set of credit policy changes that will enhance the agency’s risk management functions. Stevens also announced his intention to hire a Chief Risk Officer for the first time in the FHA’s 75-year history.”

I have the link below that has the changes but I will summarize the important ones for you.  The FHA Streamline refinance will cap the loan to value at 125%, require income and credit documentation, and if you are including closing costs in the loan an appraisal will be required. 

Starting January 1st, 2010, mortgage originators will have to order their appraisals through HVCC.  Also, FHA has reduced the time that an appraisal is good for from 6 months down to 4 months.  This makes complete sense.

I am sure many more banks/lenders will implement higher minimum credit score requirements.  My feeling is that it should be at least 640 maybe 660.  Right now some companies do down to 560 credit scores which is ridiculous.