The down payment requirement on FHA loans will go up to 3.5% (from 3%). The effective date for reforms is January 1, 2009, but the loan limits will not go into effect until the expiration of the Economic Stimulus limits (December 31, 2008).
For many years we calculated FHA down payment by way of Acquisition Cost. Now… that’s “out the window.” With the new “revisions”
Closing costs: Closing costs may not be used to help meet the minimum 3.5% down payment requirement. Closing costs are not considered in the mortgage amount/down payment calculation for purchase money mortgages.
This is a huge difference - and if you are working with a loan officer who is not familiar with FHA - you could end up at the closing table needing more money. Be careful!
Visit our website at http://www.madisonmortgageguys.com for the most current FHA mortgage news.
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