Federal Housing Administration (FHA) Commissioner David Stevens today announced a set of policy changes to strengthen the FHA’s capital reserves. Two of these changes which most directly affect borrowers are:
New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program;
New borrowers with less than a 580 FICO score will be required to put down at least 10%; and
Allowable seller concessions will be reduced from 6% to 3%.
If you are planning to get an FHA loan, check with your lender to see what these changes may mean to your ability to borrow.