Changes coming for FHA

Recently it was announced that the FHA loan program will be reducing allowable Seller contributions from 6% to 3%.   What is a Seller contribution?  A Seller contribution is when the seller of home agrees to contribute funds towards a Buyer's closing costs (or loan costs).  This can include discount points, appraisal fees, loan originations fees, etc.

There is also growing pressure to raise the minimum down payment from 3.5% to 5%.

Even with the coming changes, FHA will still be a fantastic loan option for first time buyers.   The program still allows gift funds from family, friend and/or employers.  The program also allows for state homebuyer assistance programs.

 If you are a first time homebuyer that was thinking of using the FHA program, now may be a good time to talk to a knowledgeable real estate professional or local lender.