New FHA info, good stuff!

Minimum Credit Scores Announced for FHA Mortgages

On September 3, 2010, the US Department of Housing and Urban Development (HUD) released Mortgagee Letter 2010-29, Minimum Credit Scores and Loan-to-Value Ratios. This is in accordance with Federal Register Notice FR-5404-N-01, which proposes minimum credit scores and loan-to-value (LTV) ratios.

Effective October 4, 2010, borrowers with a credit score below 500 are not eligible for FHA-insured mortgage financing. Borrowers with a credit score between 500 and 579 are limited to 90 percent LTV, which requires a 10 percent down payment. Borrowers with a credit score of 580 or higher are eligible for maximum financing, which requires a minimum 3.5 percent down payment. Borrowers with nontraditional credit histories may be eligible for maximum financing.
FHA Announces Premium Changes

On September 1, 2010, the US Department of Housing and Urban Development (HUD) released Mortgagee Letter 2010-28, Changes to FHA Mortgage Insurance Premiums. HUD has the authority to increase annual premiums for Federal Housing Administration (FHA)-insured mortgages to 1.55 percent. However, the agency is not utilizing its full authority at this time. In this announcement, HUD is increasing the annual premium and lowering the upfront premium.

For all traditional purchase and refinance products the upfront premium is 1 percent. On 30 year loans with a 95 percent loan-to-value (LTV) ratio or lower the annual premium is .85 percent. On the 30 year loans with an LTV lower than 95 percent the premium is .90 percent. For all reverse mortgages, known as the Home Equity Conversion Mortgage, the upfront premium is 2 percent and the annual premium is 1.25 percent.