Well, the rising number of defaults on loans that are insured by the Federal Housing Administration (FHA) have led to policy changes in it's loan program.  IMAGINE THAT!

Up until now, borrowers with a FICO score as low as 500 where approved for an FHA loan, WHAT!!  All that the buyers had to come up with is 3.5% down.  Soon FHA will increase the minimum FICO score to a whopping 580.  Buyers with less than a score of 580 will be required to come in with 10% down.

Don't get me wrong, I strongly believe that the FHA loan is a good product and crucial to our current housing market.  I like the fact that the loan is fully documented meaning there is no stated income.  I also like the fact that it is a 30 year fixed rate loan.  I just don't feel that this policy change will do much to reduce the agency's risk especially when you consider that FHA is insuring 30% of new loan compared to just 3% in 2007!

Wondering if you qualify for an FHA loan?  Call me today and find out 818-238-0188.