Earlier this month, you may have read or heard that the FHA was planning to reduce the MIP for most new mortgages with a closing or disbursement date on or after January 27, 2017. However, on January 20, 2017, the FHA announced that it has reversed its plans and will NOT reduce the MIP.
The Federal Housing Administration is a government agency that insures home loans and collects fees from borrowers to reimburse lenders in the case of default.
It is part of the Department of Housing and Urban Development, and the loans FHA insures are aimed at first-time home buyers and those with poor to fair credit.
Borrowers can qualify for an FHA-backed mortgage with down payments as small as 3.5%, even with a credit score as low as 580, which could signal a past bankruptcy or debts sent to collection.
The average credit score of an FHA borrower in the third quarter of last year was 679, a credit worthiness considered to be fair.Read more about this and how it can affect home sales...