FHA loans have traditional provided an excellent alternative for buyers who are short on cash and/or credit challenged. The requirements will become more stringent as new guidelines are implemented this spring and early summer.

Highlights of the tougher requirements include:

• The mortgage insurance premium (MIP) will be increased by 50 bps to 2.25 percent

• New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5 percent downpayment program. New borrowers with less than a 580 FICO score will be required to put down atleast 10 percent.
• Reduce allowable seller concessions from 6 percent to 3 percent