There are a lot of changes going on in the mortgage industry. One change that could have a major impact on the housing industry is the strong indication that loans handled by FHA mortgages, will be changing in the near future. These FHA backed mortgage programs are going to be adjusted or even overhauled by the government.
During the real estate boom, the use of FHA mortgages dropped to around 2%. That figure has shot up to 25% and even higher in some markets. Any substantial changes to FHA lending requirements could affect in some cases, the most active segment in many real estate markets (First Time Homebuyers).
Congress is pressuring FHA to tighten the standards toward borrowers. The options on what they will do to tighten these standards are broad:
1. Increase FICO score requirements
2. Increase amount of down payment
3. Reduce seller contribution to closing costs
We'll certainly be keeping a close eye on this and let our clients know of any changes but in the meantime, if a FHA loan is something you were considering, you might want to act sooner rather than later.
As always, for all your real estate needs, we're just a phone call away, melaniecameron@seacoastrealty.com or 910-202-2546