The recently passed housing bill contains several key provisions set to change fha mortgage guidelines.

The Federal Housing Authority (FHA) is set to receive an additional three hundred billion dollars as part of the recently announced housing reform bill. This money is earmarked towards helping to offer fha mortgage refinance options for millions of homeowners.

The bill also includes some key reforms to Fha mortgages and their current guidelines. The changes to current fha guidelines are as follows:

• Requiring a down payment of 3.5% of the purchase prices, up from the current level of 3%.
• Elimination of third party companies that allowed the home buyer to received a gift to cover their down payment that was financed as part of the homes purchase price.
• Capping the origination fee on reverse mortgages to $6,000 total, and limiting the origination fee to 1% of any amounts over $200,000
• Setting aside millions of dollars to help home owners who are currently upside down on their current mortgage loan.

Fha loans currently make up about 10% of all loans offered in the U.S. The recent changes will make FHA loans the centerpiece of helping home owners refinance their mortgages and should provide a key boost to helping the U.S. navigate out of the housing challenges.

7-29-2008 ? LoanNetwork.com

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