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FHA Commissoner David Stevens annouced that FHA will be making changes effective April 2010 for all new FHA loans.  The changes are being implemented to ensure that FHA can keep a capital reserve of 2.0%.  The changes are as follows;

1) FHA upfront mortgage insurance premium will increase from 1.75% to 2.25%.  It can still be included in the loan amount.

2) FHA has decreased the allowable seller assistance from 6% of the sale price to 3% of the sales price.  This is the biggest change since buyers will no longer be able to have the seller cover all the closing costs because closing costs in Delaware are almost always higher than 3%.

3) FHA loans with FICO scores below 580 must put down 10% down payment versus the 3.5% currently.

John R. Thomas

Certified Mortgage Planner

302-703-0727 Office