If you have not been paying attention to the housing market, the Federal Housing Administration (FHA) announced recently that it will be tightening FHA lending standards on all federally supported loans, the most common option for First Time Buyers due to FHA program flexibility for those with limited funds and less-than-perfect credit. This change may leave some buyers in the dark without proper programs to support purchasing a home. These changes are expected to impact 4 to 5 percent of FHA originated loans annually. Underwriters are going to more heavily scrutinize applicants with poorer credit and smaller down payments, as well as those with higher debt-to-income (DTI) ratios in an attempt to identify buyers that may not be able to pay.
Now, don’t let this change scare you. I repeat, have no fear. The changes will likely only impact 4 to 5 percent of annual FHA mortgages originated annually so don’t let this deter you from asking me to help you get prequalified for a mortgage. As always, call me at the office of Keller Williams Cherry Hill at 856.321.1212 or call directly at 609.220.6311. Your neighborhood Realtor is always at your service!