08 Jun 10 FHA Changing Seller Concession Rules for FHA Loans
2010 FHA mortgage rates have reached record lows for purchase and refinance loans. For the first time home buyers who qualify for a FHA home loan, 2010 will be a year to remember. FHA lending guidelines have seen significant changes this year.
One of the key attractions of a FHA mortgage loan is going, going, but not quite gone. Sellers and buyers who move fast can still make the most of it. According to a source at HUD, the Federal Housing Administration plans to reduce maximum “seller concessions” from 6% of the home price to 3%. Seller concession rules allow buyers to look to the property seller to pay for a variety of services and taxes connected with the transaction loan origination and local transfer fees, appraisals, inspections, closing and escrow costs among others though not the down payment.
Compare FHA loan concessions with Fannie Mae or Freddie Mac conventional mortgages, where seller concessions are restricted to 3%. For most home buyers, the FHA mortgage program provides additional flexibility that can be very useful when negotiating. ZipRealty broker, Abbie Higashi, said the new FHA guidelines made sense and she supports the move by FHA. She believes that real estate agents should “do the deals now” if more than 3% concessions would help the sale go through.
