Industry NewsMortgage

FHA changes won’t impact most buyers

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

A bailout for FHA? Don't bet on it.And what's the practical significance of the steps the agency announced last week to avoid a meltdown? What impact will they have for homebuyers and sellers who rely on FHA for affordable financing?Less than you might think if you read some of the dire reports on Friday's news: FHA's capital reserve ratio to support its single-family and reverse mortgage programs plummeted to -1.44 percent, according to an independent audit, representing a negative economic value of more than $16 billion. You may have also read that in response, the FHA plans to raise its annual mortgage insurance premiums from 1.25 percent to 1.35 percent early next year, and revoke new borrowers' ability to cancel their premiums once their loan balances hit the 78 percent LTV level. The agency also is going to expand pre-purchase counseling efforts for applicants with low credit scores and minimal down payments, and step up efforts to promote short sales to seriously delinquent ow...