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The FHA does not make loans, but rather offers insurance against default. Borrowers are willing to pay for the insurance because FHA loans only require down payments of 3.5 percent of the purchase price — and that didn't change.

The new policies, to be announced Wednesday, are designed to bring more revenue into the agency, while at the same time keeping loans available.

Under the changes, homebuyers will:

• Pay an upfront mortgage insurance premium of 2.25 percent of the total loan amount, up from the current level of 1.75 percent. A borrower taking out a $200,000 mortgage would pay a $4,500 fee, for example, rather than the current fee of $3,500. Borrowers will still be able to wrap these fees into the total amount borrowed. FHA officials also plan to ask Congress to increase the maximum annual premium that FHA can charge.
• Need a credit score of at least 580 to qualify. Many FHA lenders already require a higher score, but there had been no standard requirement across the program. Borrowers with a score lower than 580 will need a down payment of at least 10 percent.

Are you considering buying a home?

Would you like to find out if you qualify?

Prequalify Here

What is a foreclosure? or a short sale?  In today's real estate market these are common phrases for homeowners in distress.  If you are a homeowner in distress there are many options available for you. 

Foreclosure is the process of a lender reclaiming ownership of a home that the owner has not paid the monthly payments as outlined in the note which was signed when the home was financed.  After the foreclosure has taken place and the bank gains ownership of the home it is referred to as an REO or Real Estate Owned Asset.

A short sale is the process of negotiating with a lender prior to foreclosure to allow the sale of a home for less than the amount owed to the lender.  This option has proven to be successful for many distressed homeowners.  If the home is the sellers primary residence the tax consequences will be none and the damage to your credit rating is kinder than the damage of a foreclosure. The important things you will need are documentation of your hardship and a Realtor who knows the process.

Many homeowners are also benefiting from loan modifications.  The process can be very tedious however if approved the end result can be home retention.

If you are considering a short sale visit www.ReexAgent.com for more details or call 559-732-3395.