FHA changes coming….

FHA has made several announcements regarding changes coming as early as October 1st and most are effective January 1, 2010.

The change coming on October 1st is that FHA condo spot approvals will no longer be allowed.  The project will have to be FHA approved in order to do a FHA loan.

After January 1st, FHA appraisals can not be ordered by mortgage brokers or commission based lender staff.  We will not have to use an appraisal service, but will have to assure appraiser independence.

Another big change is to FHA streamline refinances.  Effective January 1st, all streamline refinances will require the borrower to have made at least 6 monthly payments on the FHA loan being refinanced.  The borrower must exhibit an acceptable payment history with no more than one 30 day late payment in the preceding 12 months.  The borrower must be employed and if cash is needed to close, assets must be verified.  There has to be a tangible benefit to the borrower as a result of the refinance – either a reduction in the monthly payment, refinancing an adjustable rate mortgage to a fixed rate or reducing the term of the mortgage.  If you are adding closing costs to the mortgage, you will have to have an appraisal.

FHA loans are assumable. This as not changed and if you are selling a home with an FHA mortgage on it, you may want to look at that as an option.  The buyer must qualify for the mortgage and you will get a release of liability on your current mortgage.

Leslie Vanderwerf, Advisors Mortgage - EmailWebsite

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Currently a Senior Loan Officer at Cross Country Mortgage LLC, it's hard to believe I have been in the mortgage business for more than 25 years and have worked with Sharlene since 2000! I love sharing mortgage insights here each week and helping people finance their homes. Listening helps me find the right program for you!

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