Below is a high-level overview of the Housing and Economic Recovery Act of 2008 that will provide you with some context on what to expect as a result of the new legislation.
Increased Down payment requirements:
Minimum contribution will increase from 3.0% to 3.5% of the appraised value. Seller funded Down Payment Assistant Programs (“DAPs”) or funds from any other interested party to the transaction will be prohibited on all loans where final credit approval has not been established by September 30, 2008.
Risk Based Premiums:
Up Front and Monthly Mortgage Insurance Premiums implemented on July 14, 2008 will change on October 1, 2008.
Condominiums:
Guidelines for project approval will be relaxed, likely by year end.
Reverse Mortgages (HECM):
Changes to loan limits and origination fees.
HOPE for Homeowners:
Program designed to assist eligible at risk borrowers through refinancing into a new FHA insured loan. Program guidelines yet to be defined by HUD.
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