top of page

Changes to FHA Loans Impact Buyers

The Federal Housing Administration announced several changes to FHA insured loans this week.

1)  The upfront mortgage insurance premium will increase from 1.75% to 2.25%.

For example: On a a $200,000 mortgage, a 1.75% mortgage insurance premium added $3,500 to the FHA loan, bringing the total loan amount to $203,500 that a borrower was required to qualify for. With the increased premium at 2.25%, the premium would increase to $4,500 and the borrow would need to qualify for a $204,500 loan. This amounts to an approximate difference of $5.37 per month at an interest rate of 5.00%.

2) The maximum amount of seller assistance will drop to 3% of the value of the