The new FHA and how it affects Santa Monica real estate

Are you one of the fortunate ones who can get a loan with FHA? Well, after April 5^th 2010 the times they are a-changing as the song goes. The window of opportunity is shrinking on current conditions.

The Federal Housing Administration is making a few changes to its guidelines and if you are an FHA buyer, it will affect your purchasing ability.

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Increase in Upfront Premiums for FHA Mortgage Insurance

FHA loans with a case number assigned on or after April 5, 2010, will have a 2.25% upfront mortgage insurance premium. This is a .5% increase. Case numbers are generally assigned when there is a contract with a property address, and a closing date AND the borrower has committed to go forward with the loan.

Please go to http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/10-02ml.pdf. for more information.

Other changes include:

New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. Borrowers with less than a 580 FICO score will be required to put at least 10% down. NOTE: Most lenders will not make loans to borrowers with FICO scores lower than 620.

Seller concessions will be reduced from 6% to 3%. HUD has not yet released an effective date for this change.

Currently, to my knowledge, there are two Santa Monica Condominium buildings that are FHA approved. I have a pocket listing in both of them – one for $380k and another at $550K. If you are interested in hearing about them, please call me (up there on the right – click the button to call with Google) and I can tell you more.

If you are a single family home buyer in Santa Monica, you are hard pressed to find something that will conform to the loan limit of $729,750 – And there are some gems out there. Santa Monica homes for sale can be found using the buttons on the side of the page – all for free!