Industry NewsMortgage

FHA streamlines federal home loan programs

Housing agency says more changes on the way

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Seeking to reduce paperwork and hassle, the U.S. Department of Housing and Urban Development has streamlined the FHA mortgage origination process by implementing a new lender insurance program, allowing home buyers to fold up to $35,000 in house repairs into their mortgages, and doing away with specialized appraisals previously required. The changes are the first of many and the FHA will consider additional changes recommended by real estate agents and lenders, Brian Montgomery, assistant secretary for housing at HUD, said in October. FHA loans were invented to make it easier for people who might not otherwise qualify to buy a house – those with bad credit ratings or other problems. As house prices have soared in many markets around the country, some buyers find it increasingly difficult to qualify for traditional loans. FHA loans offer an alternative, but the time-consuming procedures and paperwork involved have discouraged their use. "FHA was set up originally to play a cr...