The NMWelcomeHome Team Blog

The most common type of loan today is an federally backed loan know as FHA. The bill presented will most likely affect you the borrower because chances are if you are going to buy a home this will be the loan for you.  For many reasons its the best. Low down payment, credit guidelines not as strict, low mortgage insurance and so on.

This bill has passed the house and will likely become law as part of the Financial Regulation Overhaul Package being debated in Congress. A few highlights: 

1) FHA’s annual insurance premium was .55% will now be raised to 1.55%. This is the CAP, not where it’s going to be. That being said… 

2) The annual mortgage insurance premium will rise to .85% for loans up to and including 95% LTV and to .90% for loans above 95%. Most FHA loans today will fall into the latter category percentage. 

3) Mortgage Insurance Premium was raised recently but luckily is short lived.  The Upfront Mortgage Insurance Premium, now sitting at 2.25% will be lowered to 1.00%. I think this pretty much makes everything a wash. 

4) There was talk of increasing the affordable 3.5% down payment for FHA to 5% but the attempt to raise the minimum down payment on FHA loans from was defeated.

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