Two important updates to FHA guidelines
There have been two important updates to FHA guidelines this year. The first update is related to underwriting for high risk borrowers. Specifically, this guideline deals with borrowers who have low credit scores and high debt to income ratios. The second FHA guideline change was made to the condominium approval process. Both changes will impact certain buyers and investors.
There are two primary reasons for the changes to FHA guidelines. The first is to reduce the FHA’s risk. The second is to help solve the affordable housing crisis. The low credit score guidelines are intended to reduce the FHA’s risk associated with certain borrowers. The condo project approval process guidelines were modified to help address the affordable housing crisis. What is the impact to buyers and investors? The new guidelines will make it more difficult for some high risk borrowers to get a loan. On the flip side, the new FHA guidelines will make it easier for qualified borrowers to buy a condominium.
In the full article I review the guideline changes in more detail. I then follow this up with additional thoughts on what these two updates mean for home buyers and investors.
If you plan to take advantage of the new FHA condo approval process and need financing, check out our multi-family loan programs. Our Multi-family loans are intended to provide Minnesota borrowers with short-term financing for constructing or rehabbing non-owner occupied investment projects.
