Spring is in the air and with spring comes the transition from snow to flowers.  Alright, I’m dreaming.  Living in Colorado I should recognize that snow happens, especially March- typically our snowiest month. But let me have my fantasy….

Assuming spring does arrive (and it eventually will), there are other important changes to watch for.  On April 05, 2010, The Housing and Urban Development (HUD) will implement several changes to loans guaranteed by the Federal Housing Authority (FHA).  These changes will cost buyers who wait, big dollars!

¨ The cost of required upfront mortgage insurance for loans guaranteed by FHA will increase form  1.75 to 2.25.  The upfront mortgage insurance is typically financed into the loan however, buyers will still absorb the mortgage insurance cost. 

¨ Reduction in allowed seller paid concessions will be reduced from 6% to 3%!  This is the most significant change because many first time home buyers barely have the funds for a down payment and look to the seller to pay their closing costs.  For example: With a $200,000 purchase, the seller may pay up to $12,000 (6%) currently.  With the change to 3%, the allowable paid closing costs would be reduced to $6,000!  This change should occur toward the end of spring, but no definite date has been determined.

Other Changes:  March 31st expiration of the Federal Reserve Board’s mortgage backed securities

purchase program which has kept home loan rates low for over a year.

April 30th: Buyer tax credit expires!  Buyers must be under contract by the 30th and close by June 30th!


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