Salt Lake City Real Estate by Corie

Changes In FHA Financing That Affect Salt Lake City Home Buyers!

Changes and lots of them are going on with FHA financing. Trust me it will affect many Salt Lake City Home buyers.  In Utah, higher credit scores, and larger down payments will soon influence more than anything how much house or condo you can buy.

In this weeks Salt Lake Tribune, Lerron Little the President, Utah Association Realtors has written his take on forthcoming changes. Since you might not see it, I am going to hit some high spots for you, and maybe link you up with some other articles on the subject.

The reason?

If your thinking of buying a new or previously owned home or condominium in the Salt Lake Valley soon you had better know whether it makes real good sense to hurry up and get er done before these changes take effect.

Some of the highlights about FHA loans that Lerron covered in the Homes in Utah section of the Tribune today.

• FHA started insuring loans in 1934.
• Home buyers that buy a home or condo with an FHA loan pay an insurance premium to the lender to offset the risk of foreclosure.
• FHA does not loan the money to buy a house or condo in Salt Lake, they just guarantee the bank that the mortgage will be paid.
• Home buyers with credit scores above 580 may still get a mortgage on their home with only a 3.5% down payment.
• If you intend to buy a home in Salt Lake City and your credit score is less than 580 you can expect a down payment of 10% of the purchase price of either a home, condo, or town home in SLC.
• FHA has asked congress to increase the amount of the insurance premium that they can charge the home buyer.
• Starting this summer, the amount that a seller can contribute toward closing costs will be reduced from 6% to 3%.
• On the positive side, the 90 day seller ownership requirement has been waived and will allow investors to purchase and fix up houses to sell to buyers with low down payments. This new rule will be in effect until  Feb 1, 2011.

So, it looks like if your credit score has remained strong thru all of this turmoil and you have a little bit of cash you still can buy that home for just a little bit down.

Thats what I think.

Here is what some other folks think.

Ken "FHA" Cook from Marietta Ga. and a big Active Rain contributer Says:

The Federal Housing Administration, the arm of the Department of Housing and Urban Development which insures mortgages on millions of home, recently adopted some changes and announced a smattering of proposed changes which have the potential of making it more difficult for struggling Americans to enter the housing market or make a change in housing. Read Kens entire article

Jeff Belonger from the fhaexperts.com in New Jersey has a totally different take on things:

"What continues to frustrate me is that all these government bank bailouts, loan purchasing, Fannie Mae and Freddie Mac guarantees, FHA expansion, tax credits, etc. are doing nothing more than temporarily artificially propping up the real estate market.  The government cannot continue with these policies and the result will be another drop when they stop." Read the complete article.    Don't be mislead by the title.

Finally, Mathew Ferrara in his Feb. 1st article in Real Town really took issue with FHA, He said among other things:

As recently noted in this column, FHA is a mess. The Federal Housing Authority has been backing loans like a Madoff, and their scrutiny of borrowers has been just as good. With a wink-wink, nod-nod, FHA has come dangerously close to disaster, with significant proportions of its portfolio making only one payment before becoming delinquent. Now that’s all about to change. The question is: Will REALTORS be ready?
you should read the rest of Mathews article here

So, there you have it. I hope some useful information that will help you take the necessary steps to buy that Salt Lake City Home.

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Or just call us @ 801-567-0946. We know more stuff than just why the changes in FHA financing can affect Salt Lake City Home buyers.

Published Saturday, February 06, 2010 12:46 PM by Corie Seymour