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Wednesday, June 3, 2015

SHOULD is now MUST in the FHA Handbook

It's likely you won't hear this on the 5 o'clock news but it's important to people considering buying or refinishing their home. After reading this you may want to look into all types of loan products available.

The 4155 is the FHA handbook. Changes have been made to the Federal Housing Administration's (FHA)  handbook and the word MUST now shows up 2669 times with regards to FHA appraisals where it previously said SHOULD.

This gives appraisers a lot more work they MUST focus on... A lot more work and technically a lot less leniency means higher costs for FHA appraisals. Which will likely be passed on to the buyer raising their closing costs. Plus, all this "MUST" is distracting for the big picture, finding the right value.

So that in addition to the high FHA mortgage insurance premiums makes FHA loans even more expensive and less appealing.

It seems clear that all these changes are being enacted to push people away from FHA mortgages.

Since you can now get conventional loans with as little as 5% down, the only reason left to consider FHA is having a low credit score.

So what's that you say? How do you improve your credit and avoid FHA?

Need another reason to avoid FHA? More sellers are deciding not to accept offers from buyers using FHA financing due to the strict property condition guidelines. Making FHA buyers have fewer properties to choose from when looking for a home.


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