Looks like there will be a lot of good news heading our way if progress happens in Congress this fall. FHA loan limits should increase. Worst case seems to have low cost counties increasing to $271,000 from $200,160 and high cost counties going up to $417,000 from $362,000. This will help with seniors looking at the HECM Reverse Mortgage in addition to homebuyers, and those looking to refinance from 2/28 loans. It is also good news for sellers as more will have homes eligible for the program.
Down payment requirements look to be halved--going from 3% to 1.5%. That can make a big difference, too. Competing with higher PMI rates of the Flex program from Fannie Mae and its counterpart from Freddie Mac, FHA will become more competitive for the first time home buyer. The program is not limited to first time homebuyers, of course, and there is no income limit. The seller can contribute a higher percentage of the sale price toward buyer closing costs, too--6% versus 3%. [unless 10% is put in as a down payment]
All of these proposed changes should restore FHA's market share, which was nearly 10% a decade ago. We can all hope that there is good FHA news around the corner.