Big FHA Changes WILL impact Buyers and Sellers

HUD has announced Big Changes for the FHA Program and if you're not
careful you could get burned. Not all of these changes have an effective
date as of now, so we've listed these by order of, what we feel would be of
greatest impact to you and your clients!

1.) BAD CHANGE - Seller Concessions are to be reduced from the current
maximum allowable of 6% to a maximum allowable of 3%. This change will
greatly reduce the amount of potential home buyers...most of our mortgage
clients need 6% from the seller, especially those purchasing a home that
currently has non-homestead taxes. HUD has not released the effective date
for this change.

2.) BAD CHANGE - No more Spot Loan Approvals for Condominiums. This means
an entire condominium project must be approved by HUD in order for any one
unit to be eligible for FHA financing. This process, provided the project
is eligible, could take several months to complete.This change will affect
all case numbers assigned on or after February 1st, 2010. This does not
mean your transaction must close on or before February 1st, 2010. Case
number assignments take anywhere from 24 to 72 to hours to process...If
your offer or even potential offer is within days of any of the HUD
deadlines we recommend asking the loan officer to order a case number
assignment right away. If the loan officer can not accommodate please give
us a call - we would love to take care of your client!

3.) GOOD CHANGE - Site Condos are treated the same as single family homes.
This means no Spot Loan or Project Approvals required. This change has
already taken place...we just wanted to make sure you were aware of this!

4.) BAD CHANGE - Up Front Mortgage Insurance Premiums will be increased
from 1.75% to 2.25%. This will affect all loans with case numbers assigned
on or after April 5th, 2010. This does not mean your transaction must close
on or before April 5th, 2010.

5.) GOOD CHANGE - To help provide for sales of foreclosed homes, HUD
announced on January 15, 2010 a one-year waiver of a resale restriction
under rules applicable FHA loans. The waiver becomes effective on February
1, 2010. ***All transactions must be arms-length with no identity of
interest between the buyer and seller or other parties participating in the
sales transaction.

6.) BAD CHANGE - FHA will now require a minimum FICO score of 580 for all
buyers putting less than 10% down. Based on the current lending
environment, we do not see this having too much of an impact. ***For quite
some time lenders have required anywhere from a 620 FICO score to a 640
FICO score. HUD has not released the effective date for this change.

We hope you find this information useful. As HUD provide us with
additional details we will be sure to pass them along to you too!

Best Regards,

Christian L. Draheim & Denise Huettner

Vice President of Government Lending & Executive Assistant

Gold Star Mortgage Financial Group

cdraheim@goldstarfinancial.com
dhuettner@goldstarfinancial.com
www.facebook.com/cdraheim1
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800.506.3076
www.christiandraheim.com

Please be sure to ask us about FHA 203K financing for your Buyers and
Sellers!