FHA Guideline Changes

Rates today are the same as yesterday.



What I want to take a minute to do is acquaint you with some of the new
rules for FHA loans that will be effective August 1. These are
critical to many borrowers, as FHA loans are currently substantially
better both in interest rate and in underwriting flexibility than
conventional financing.



Previously:

No loans approved less than 2 years from bankruptcy.

As of August 1:

No loans approved less than 4 years from bankruptcy, unless significant extenuating circumstances can be proved.



Previously:

No loans approved less than 3 years from foreclosure

As of August 1:

No loans approved less than 7 years from foreclosure



Previously:

Rental income allowed to offset liability for residence being converted to investment property (when purchasing a new home)

As of August 1:

Rental income disallowed on conversion to investment, unless 30% equity in the property.



There are more in the same vein. Please be aware of these changes.
Additionally, FHA is changing LTV requirements, cashout requirements
and reserve requirements for most loans, and altering the up-front
mortgage insurance premium required, although in this case, it is true
that many borrowers will now pay less than they otherwise would have.
So it’s not all bad news.



Stay tuned for more. And as always, call with questions (801-310-3407)
or hit reply and we can get you the information you need.



Cj

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