Thinking about refinancing your existing mortgage, or taking out a new one? Don’t delay, or it could cost you. Some Federal Housing Administration (FHA) changes involving tighter lending standards and higher mortgage insurance premiums already took effect on April 1st, while others are on the way – and these changes could make a dent in your wallet.
So what’s prompting these changes? They come in the wake of the FHA’s Mutual Mortgage Insurance Fund – which is used to fund homeowner programs – announcing a deficit of over $16.3 billion for fiscal year 2013.
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Rehabbers and real estate investors rejoice: You’ll still be able to sell houses to first-time buyers using low-down payment FHA-insured mortgages next year, even if you’ve owned the fixed-up property for less than 90 days.
The Federal Housing Administration has decided to extend its rule permitting loans on quick “flips” of renovated houses beyond the scheduled Dec. 31 expiration deadline. The policy is widely considered one of the key federal government moves that has encouraged private investors in large numbers — often mom and pop, small-scale operations — to buy foreclosed and deteriorating houses from lenders, then repair them and resell within short periods of time.
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Annual Report to Congress Regarding the Financial Status of the FHA Mutual Mortgage Insurance Fund Fiscal Year 2012
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Without the Federal Housing Administration’s support, it would have been much more difficult for middle-class families to get a home loan since the housing crisis began.
For close to 80 years the Federal Housing Administration has helped millions of working-class families achieve homeownership and has promoted stability in the U.S. housing market—all at no cost to taxpayers. The government-run mortgage insurer is a critical part of our economy, helping first-time homebuyers and other low-wealth borrowers access the long-term, low down-payment loans they need to afford a home.
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Here’s some encouraging news for condominium unit owners, sellers and buyers: The biggest source of funding for low-down-payment condo mortgages, the Federal Housing Administration, has revamped controversial rules that caused thousands of buildings across the country to lose their eligibility for FHA financing.
The revised guidelines, which were issued Sept. 13 and took effect immediately, should make it easier for large numbers of homeowner associations to seek certification by the FHA. The certification process is intended to provide the FHA, a government-run mortgage insurance agency, with key information about a development’s legal, physical and financial status. Without approval of an entire development — regardless of whether it’s a small complex in the suburbs or a massive high-rise in the center city — no individual unit can be financed or refinanced with an FHA mortgage.
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The Federal Housing Administration has finally done what it promised back in May: published revised rules that could convince condo associations across the country to get certified or re-certified for financing, thereby opening individual unit owners and sellers to low down payment, FHA-insured mortgages once again.
For condo boards, real estate agents and property managers, the long-awaited rule changes announced yesterday should prove to be “excellent news,” that will “help spark home sales and help tens of thousands of condominium associations recover from the housing slump,” according to the Community Associations Institute, the largest U.S. trade group in the field.
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The Federal Housing Administration (FHA) Fiscal Solvency Act of 2012 has been passed by the full House of Representatives by a vote of 402-7. The Fiscal Solvency Act includes provisions to strengthen and broaden the ability of the U.S. Department of Housing & Urban Development (HUD) to avoid or recoup losses for loans originated or underwritten by a mortgage lender which did not comply with FHA guidelines, as well as expand HUD’s ability to terminate the authority of poorly performing lenders to participate in FHA programs.
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In 2010 HUD issued updated and revised processing requirements for recertifying FHA approved condominium projects that would expire in December of that year. In the same document, HUD mandated that all condo projects, which received approval prior to Oct. 1, 2008, would require recertification on or before Dec. 7, 2010 (around 15,000 across the U.S.). Further, every FHA project certification would require recertification 2 years from the date of issuance.
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Thousands of condo unit owners and buyers around the country could soon be in line for some welcome news on mortgage financing: Though officials are mum on specifics, the Federal Housing Administration is readying changes to its controversial condominium rules that have rendered large numbers of units ineligible for low down-payment insured mortgages.
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Those who follow the condominium market hoped federal guidelines released last week would provide a shot in the arm for their beleaguered industry.
Instead, they said, they got a slap in the face.
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