HUD Will Require 3.5% Down Payment for FHA Loans

HUD has posted changes to the required down payment structure. These changes are effective for case numbers assigned on or after January 1, 2009.

HIGHLIGHTS:

Effective Date
Case # assignments on or after January 1, 2009

Down payment
3.5% and can no longer consist of Borrower paid closing costs.. i.e. the entire investment is via true down payment (96.5% LTV MAX)

LTV
96.5% max based on the lesser of value or sales price

Refinances
Up to a 100% LTV which includes the UFMIP (i.e… the base loan amount + UFMIP cannot exceed 100% of the value*).

The effective date for this change is for case number assignments on or after January 1, 2009

*lesser of the original purchase price or value if not already FHA insured. Cash out refinances remain limited to 85% LTV or state mandated restrictions. Subject to statutory loan limits as determined by the subject property county.

Please let me know if you have any questions. I’m sure I’ll run into some investor bulletins, and possibly more HUD mandates between now and the effective of these changes and I will alert you to these if/when they are posted.

Tags: fha, fha down payment, HUD | Category: Texas Mortgage News |