FHA Changes Set to Take Effect October 4, 2010

September 7, 2010

Since the original post below, the Federal Housing Administration has decided to postpone the changes until October 4, 2010.  Premium fee changes will apply to all new case numbers as of that date.  This postponment will give lenders time to implement and test their systems prior to the changes taking effect.  Stay tuned for more updates and call if you have any questions.  We're always here to help.


August 9, 2010


The mortgage landscape has changed once again. Congress has passed bill  H.R. 5981, and once the President signs it FHA will lower the upfront premium on home loans while increasing the annual premium. The upfront premium will decrease from 2.25% to 1.25% and the annual premium will increase to .85-.90% depending on the loan to value (LTV) of the loan. A loan with an LTV of less than 95% will increase to .85%, while LTV’s greater than 95% will increase to.90%.

You can read the full statement here.

What does all of this mumbo jumbo mean? Borrowers who are securing an FHA home loan will bring less money to the closing table, which sounds great. But as you know, if it sounds too good to be true it usually is. While buyers will bring less money to the table, they will see an increase in their monthly payment. This increase in the annual premium will impact the borrower’s debt to income ratio, which in some instances means a buyer will need to make an adjustment to their home search.

Loan changes keep coming fast, and we work with top professionals in the industry who can keep you informed. Give us a call and we’ll be happy to refer you to an industry leader that can help you make sense of it all. I hope this helps.


Stacy is a licensed REALTOR® and the team leader of The Jones Team, a group of REALTORS® in Katy, who work together to provide exceptional service for their clients. Stacy and his team specialize in the areas west of downtown Houston. These incredible real estate agents can help you buy or sell a home in locations such as Katy, Cypress, far West and Northwest Houston, Richmond, Fulshear, Sugar Land, Spring Branch, Memorial, Spring, Tomball, The Woodlands, and Magnolia. Whether you are in the market to sell a home, buy a home, have a question about home appraisal value, need advice about home staging ,or have any other real estate related questions, Stacy and The Jones Team are available to help.

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