Warning: Florida Real Estate Market Faces New Tougher FHA Loan Guidelines

by Rodney Forbes on January 30, 2010

Just when you thought the real estate market in the West Palm Beach area has turned the corner the FHA sets new tougher loan guidelines for borrowers. With the First Time Home Buyer Program set to expire this year and interest rates sure to increase in the future, the time to buy is now if you’re looking.

1) New MUCH tighter FHA Lending  Standards. The FHA has become the lender of last resort over the last few years…and now, they are going to start turning down more borrowers.

2) FHA trying to fight rising mortgage defaults.

3) Premium to 2.5%. Meaning, more money down from the borrower….unless the get the seller to contribute to their closing costs…

4) The seller can only contribute 3% of the sales price to the buyers closing costs…vs 6%.

5) Downpayment requirements…3.5% with 580 FICO and above

6) Less than a 580 credit score? 10% down. However, when you watch this CNBC video you will hear directly from the FHA commissioner on the fact that very few borrowers with low scores will get a FHA loan.

If you are interested in buying or selling a home in the Palm Beach County area, specifically Palm Beach Gardens, Jupiter and West Palm Beach, please visit my Forbes Realty website. For frequently updated information on foreclosures, short sales, real estate news and market conditions visit my South Florida Real Estate Report blog. There are many free reports as well as free access to MLS listed properties. You can also call 561-337-4810.

Rodney Forbes is a licensed Realtor®, certified short sale/REO specialist and broker for Forbes Realty of South Florida Inc. Rodney has co-authored the book “Should I Short Sale My Home?”. Get your FREE copy at www.SouthFloridaRealEstateReport.com

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