Written By: Stacey Sprain, Op-Ed Writer
Need FHA Training? CLICK HERE: http://www.FHA-Classes.org
This week brought forth lots of action on the FHA-front once again. Let’s take a close look at all the news this week and how it may and will affect the origination and processing of FHA loans.
By now you’ve likely heard that the future of downpayment assistance is gaining favorable momentum and there just might be some sort of negotiation between HUD and Capitol Hill to bring it back to life in the future. I spoke directly with a representative with Nehemiah on Thursday to get first hand opinion on what we might expect and how soon we might expect any official action. I was told that they are hopeful that an agreement will be made to breathe life back into DPA but that it’s not likely to happen before the October 1st deadline.
The future of DPA is completely unclear at this point. But experience tells me that we shouldn’t expect the proposal to clear the House and Senate in time to meet the September 30th expiration date for use of DPA. It’s more likely that a bill could pass to take affect in 2009. I personally don’t expect this will be resolved within the next two weeks but then again, I’ve seen miracles like this happen before so we can never be certain. Bottom line is that right now, negotiations are underway for a compromise but there are no guarantees.
We’ll just have to keep our eyes on our news alerts!
To support the future of downpayment assistance, I strongly suggest you visit the DPA websites which provide direct links and instructions to contact your state representatives so you can voice your support. I’d suggest visiting Nehemiah’s site, Ameridream’s site and the Genesis Preferred program site for additional information.
Also this week, HUD tossed us another tidbit by way of Mortgagee Letter 2008-23 which finally clarifies future down payment requirements for FHA lending. The new downpayment of 3.5% will be effective for cases assigned on and after January 1st of 2009.
A couple of very important notes on the changes: There will no longer be such a thing as “financed” or allowable closing costs that will be counted toward the borrower’s minimum investment requirement. Maximum mortgage will simply be the lower of the purchase price or appraised value – 3.5% + the up-front MIP. The total LTV including the financed MIP cannot exceed 100%. Sellers can still contribute up to 6% toward buyer costs but if there is no seller credit, the buyer will need to be prepared to bring their closing costs and prepaids to the closing table.
And lastly on FHA this week, have you noticed the HUGE dip in interest rates? Another refinance spurt is officially “open for business!” Opportunities abound out there right now to refinance existing FHA borrowers to lower interest rates via streamline refinances, FHASecure refinances and even for cash out refinances so don’t miss this window of opportunity! If you’re not up to speed on your FHA refis, now is the time to get yourself signed up for training! NAMP offers FHA/VA Government training through its partnership with FHA Online University and I highly suggest you take the time to educate yourself to cash in on these refi opportunities while they’re in front of you!
Need FHA Training? CLICK HERE: http://www.FHA-Classes.org
About The Author
Stacey Sprain - As an op-ed writer, Ms. Stacey Sprain is currently a NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). With over 15+ years of mortgage banking experience, Stacey is also a Quality Control Manager for a major mortgage lending institution.
