In January, Federal Housing Administration (FHA) Commissioner David Stevens announced a set of policy changes to strengthen the FHA’s capital reserves, while enabling the agency to continue to fulfill its mission to provide access to homeownership for underserved communities.

The FHA will propose to take the following steps:
• Increase the mortgage insurance premium (MIP)
• Update the combination of FICO scores and
down payments for new borrowers
• Reduce seller concessions to three percent, from
six percent
• Implement a series of significant measures aimed at increasing lender enforcement

U.S. Housing and Urban Development Secretary Shaun Donovan previewed the changes in December of last year, noting that the FHA would announce additional details before the end of January. In addition to the changes proposed, the FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward. To get a more detailed account of the policy changes listed above, please click here.