• Client Info
  • Realtor Info
  • Seller Login
  • Contact

Boulder Property Network

Boulder Property Network

Boulder County Real Estate

  • Home
  • Search Real Estate Listings
  • Duane’s Timely Topics
  • Results Count
    • Why We Work by Referral
    • Testimonials
  • Our Team
    • Timmy Duggan
    • Barb Passalacqua
    • Kelsey Jensen
    • Duane Duggan
  • Real Estate Blog
You are here: Home / Boulder Real Estate Blog / How New FHA Changes Could Affect Home Buyers

How New FHA Changes Could Affect Home Buyers

October 21, 2010 by The Boulder Property Network

Earlier this week, the Federal Housing Administration (FHA) implemented changes to the premium structures for an FHA-backed mortgage.

My membership in the Top 5 in Real Estate Network® requires that I remain committed to keeping my clients and consumers informed, so it’s important that I let you know that these changes may make it more costly for home buyers to procure FHA loan products.

In the wake of the real estate decline and credit freeze of the past three years, FHA-insured loans soared as borrowers sought alternative avenues for securing affordable mortgages. The FHA loan is popular because its minimum down payment is 3.5%, whereas most conventional loans require a much higher down payment. Recently, however, housing experts have raised concerns about FHA’s shrinking funds and its ability to handle increasing defaults, sparking the agency’s impending regulation changes.

According to CNNMoney.com, FHA reported that its reserve fund has dropped to 0.53% of its insurance guarantees, well below the 2% ratio mandated by Congress and the 3% ratio it had last fall. This fund covers losses on the mortgages the agency insures. FHA borrowers pay for the insurance that backs their loans in the form of an upfront premium and an annual premium.

The agency has seen a spike in delinquencies amid the mortgage meltdown. Some 14.36% of FHA loans were past due in the third quarter, according to the Mortgage Bankers Association. To compensate for its rapidly depleting reserve fund, the following changes will be implemented to FHA lending:

  • Upfront mortgage insurance premiums will decrease from 2.25% to 1.00%.
  • At the same time, the 0.55% annual premium will be increased to 0.85% for mortgages with loan-to-value ratios up to and including 95%, and to 0.90% for loan-to-value ratios above 95%.
  • Borrowers will be required to have a credit score of at least 580 to qualify.

These changes in FHA lending may be paving the way for conventional financing with private mortgage insurance (MI) to make a comeback in lending for low down payment buyers. According to loan experts, both MI and FHA have their place, but borrowers should consult with their real estate professional and lender to determine what loan options are best for their particular situation.

For more information on FHA lending, please e-mail me, and please forward this email to others who might be unaware of how they may be impacted by these important changes.

 

Filed Under: Boulder Real Estate Blog

Contact Us

  • This field is for validation purposes and should be left unchanged.

Blog Archives

Featured Listings

$199,700For Sale!1199 Brainard Lake Ward, CO 80481View Listing
Lot 12: $173,000 / Lot 13: $174,700For Sale!0 5th St (Lot 12 & 13)Nederland, CO 80466View Listing

See all of our listings.

Recently Sold Properties

389,700Sold3365 Chisholm Trl B101Boulder, CO 80301View Listing
$2,997,000Sold3080 Galena WayBoulder, CO 80305View Listing
$649,700 Sold271 Jefferson AveLouisville, CO 80027View Listing
$628,700Sold170 Golden Gate Canyon RdBlack Hawk, CO 80422View Listing
$655,000Sold2323 Buttercup CtSuperior, CO 80027View Listing
$595,000Sold1513 Sepia AveLongmont, CO 80501View Listing
$873,000Sold5455 Lee Hill DrBoulder, CO 80302View Listing
$451,000Sold311 Windance RdEstes Park, CO 80517View Listing
$235,000 / 280,000Sold765 Pine St & 797 Pine StNederland, CO 80466View Listing
$770,000Sold705 Club Pl.Louisville, CO 80027View Listing

Tweets by BoulderPropNet

Download our App

Boulder Property Network AppGet the Boulder Property Network mobile app to start your search for a new home right from your phone or other mobile device!

Download it here >>

Neighborhood News Report

How's the market? We can provide you with accurate information on the real estate market activity (Listings , Sales & more) in the area you are most interested in!

Get your Neighborhood News here >

Free Home Valuation

Free Market ReportBoulder Property Network can provide you with the information that you need to make a plan for your real estate purchase or sale.

Get your home valuation >>

Looking to Sell?

Looking to Buy?

Information for Investors

Recommended Reading for REALTORS®

REALTOR® for Life

by Duane Duggan

realtor-for-lifeWhat does it take to be a REALTOR® for life? This book provides first hand knowledge from one of the most distinguished and active careers in real estate. Duane Discusses his newly published book here.

Purchase on Amazon

© 2023 Boulder Property Network • RE/MAX of Boulder Inc.
2425 Canyon Blvd. #110, Boulder, CO 80302
800-825-7000 x611

Boulder Property Network on FacebookBoulder Property Network on TwitterDuane Duggan on LinkedinOur listings on YouTubeDownload our Listings App
Site Map