HUD Tightens Loan Standards

In Eugene, as in the rest of the nation, lending standards for HUD insured loans—an increasingly popular option for home buyers—are becoming stricter.  The following changes are scheduled or planned to occur this year:

  • Increased mortgage insurance premium—beginning mid-April, the rate will be 2.25%, up from 1.75%
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  • Increased down-payment (10% vs. 3.5%) for borrowers with a FICO less than 580
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  • Reduction of seller concessions from 3% from 6%
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These changes will make it harder for some borrowers to get loans, and will soften demand, somewhat, for house purchases.  However, at least the changes aren’t too drastic.

 

HUD loans are a bright spot in a thorny lending environment.

 

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