The New FHA and How It Affects Santa Monica Real Estate

by WestsideDB on January 22, 2010 · 0 comments

in FHA/Government Issues,Legal Real Estate Issues,Santa Monica real estate

Are you one of the fortunate ones who can get a loan with FHA?  Well, after April 5th 2010 the times they are a-changing as the song goes.  The window of opportunity is shrinking on current conditions.

The Federal Housing Administration is making a few changes to its guidelines and if you are an FHA buyer, it will affect your purchasing ability.

Santa Moncia Keller William Signage 300x168 The New FHA and How It Affects Santa Monica Real Estate

Increase in Upfront Premiums for FHA Mortgage Insurance

FHA loans with a case number assigned on or after April 5, 2010, will have a 2.25% upfront mortgage insurance premium. This is a .5% increase. Case numbers are generally assigned when there is a contract with a property address, and a closing date AND the borrower has committed to go forward with the loan.

Please go to http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/10-02ml.pdf. for more information.

Other changes include:

New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. Borrowers with less than a 580 FICO score will be required to put at least 10% down.
NOTE: Most lenders will not make loans to borrowers with FICO scores lower than 620.

Seller concessions will be reduced from 6% to 3%. HUD has not yet released an effective date for this change.

Currently, to my knowledge, there are two Santa Monica Condominium buildings that are FHA approved.  I have a pocket listing in both of them – one for $380k and another at $550K.  If you are interested in hearing about them, please call me (up there on the right – click the button to call with Google) and I can tell you more.

If you are a single family home buyer in Santa Monica, you are hard pressed to find something that will conform to the loan limit of $729,750 – And there are some gems out there.  Santa Monica homes for sale can be found using the buttons on the side of the page – all for free!

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