Juicy Estates: Mortgage Blog

FHA Down But Not Out

As I mentioned in my post of September 9th, 3 Alarming Facts About FHA, a recent report in the Washing Post confirms that the program will violate it’s federal charter as reserves fall below the mandatory floor enacted by congress.

“It’s very serious,” FHA Commissioner David H. Stevens said in an interview. “There’s nothing more serious that we’re addressing right now, outside the housing crisis in general, than this issue.”

What this will mean for potential home buyers is tighter underwriting guidelines including 660 or 680 minimum credit scores, maximum debt to income ratios of 48% and even the possibility of increased down payment requirements.

There is a very narrow window to take action for those marginal buyers who don’t have the strongest credit scores or who may be carrying to much debt.

For those of us that work in the luxury home market and dont’ regularly use FHA financing this is still a concern.  The foundation of the housing recovery in South Florida is based, in part, on the selling off of inventories in all price ranges.  These developments with FHA will eliminate a large pool of potential buyers from the market.

This entry was posted on Monday, September 21st, 2009 at 9:50 pm and is filed under Home. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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