How is FHA mortgage lending attempted to be improved?


FHA mortgage lending guidelines are being revised for several months now, and there are certain modifications offered to improve FHA loans affordability and attractiveness to homebuyers.

FHA Mortgage Lending Expected Changes

A new insurance policy will be implemented. Unlike now, when FHA mortgage lending practice requires standard policy for all FHA borrowers, FHA insurance is proposed to change in order to evaluate the risk each borrower represents.

The 3% down payment requirement is expected to be reduced or removed.

FHA mortgage limits are expected to be raised (in some states the FHA loan limit is expected to top $800,000) as FHA loans were not sufficient enough for people living in high cost areas as NY and CA and many people had to take subprime loans instead turn to FHA.

FHA is also trying to help people struggling with existing costly mortgages refinance to more lenient FHA mortgage lending terms.

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