After a roller-coaster year of ups and down, FHA loan guidelines in 2013 could see more changes. Of course the Department of Housing and Urban Development started asking for more documentation a few years ago, so we do not see 2013 FHA requirements increasing for the most part. However, FHA reserves dipped to record lows because of increased defaults on mortgages that the Federal Housing Administration insures. It seems a to be well-known that FHA will seek a bail-out from American tax payers in the first quarter of President Obama’s second term. Congress will meet to discuss injected more money into this government mortgage program, while raising or maintaining the 2013 FHA loan limits.
5 Most Frequently Asked Questions Regarding Changes in 2013 FHA Guidelines
- Will Congress mandate a higher down-payment requirement on first time home buyers?
- How much will mortgage insurance premiums be raised to compensate for lost revenues?
- Will FHA raise the 500 minimum credit score?
- Will the streamline program allow borrowers to finance closing costs for refinance transactions?
- Will the 2013 FHA guidelines continue to accept seller concessions?
With the Federal Reserve’s commitment to keep low interest rates and Obama being reelected you can bet that 2013 will be another great year for government loan origination. We believe the changes to FHA guidelines will be minor, but we expect to see a hike in FHA premiums. Most industry pundits believe FHA will continue to dominate the market for first time buyer loans. Most signs point towards new buyers selecting FHA for home financing and there have been talks about expanding HARP 3.0 with FHA to help more underwater homeowners in the year to come.