Fha down Payment

So what is to come of this year 2009? Something many potential homebuyers are not too keen on hearing. Starting January 1, 2009, an FHA loan down payment has increased from slightly less than 3% down to 3.5% down. Although this might seem like a rather marginal increase, higher priced homes are getting hit hard.

FHA has been tightening their ropes slowly but surely throughout the year with the big real estate bust. This comes as no surprise to many investors and realtors. Actually, a slight increase in business for realtors was seen in December, as many of them were encouraging their clients on buying while the down payment is lower.

This change is projected to affect quite a few people, and especially first time home buyers. It has been hard in the past for first time home buyers to qualify for a mortgage and make the down payment. Now, with the added percentage, home buying might be out of the reach for some for a few more years.

There is, however, one good point to bring out of this whole FHA change. It is staying true and actual to the percentage being put toward the home as a down payment. For example, when you put 3% down before this change, you were actually putting 2.25% toward the cost of your home. The other percentage, which works out to be roughly .75%, was to cover closing costs, fees, etc. Now, with the 3.5% down, you are actually allowing for more “down payment” on your home.

Being that FHA down payments and FHA guidelines in general has not seen many changes in quite a few years, some people welcomed this change. Every now and again things have to come up to date, and this was just one of those times.