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by CareyBot

The Federal Housing Administration will tighten credit standards and implement new rules for appraisals on Jan. 1, saying a study to be published in November is expected to show FHA's capital reserve ratio slipping below mandated minimums.FHA's insurance fund is sufficient to cover future losses, Federal Housing Commissioner David H. Stevens said, but the tighter policies will ensure that the loan guarantees remain self-sustaining and continue to be funded by premiums paid by borrowers, not taxpayers.The new policies also include guidelines for ordering appraisals that are intended to protect appraisers from pressure by lenders. The new guidelines will ensure FHA appraisal policies are in "full alignment" with rules employed by Fannie Mae and Freddie Mac since May 1, the Departme...