Due to a decline in capital reserves, the FHA will be increasing premiums again to FHA buyers who will be obtaining a loan as of April 1, 2012. Here’s your Need to Know info:
- You must be under contract by the end of March 31, 2012 to avoid the rate hike.
- Down-payment requirements remain at 3.5%
- Loan limit remains at $729,750
- Up Front Insurance Premium will increase to 1.75% of the base loan amount (75% increase)
- Annual Insurance Premiums will go up 0.1% point for loans under $625,500
- Annual Insurance Premiums will go up 0.35 points for loans over $625,500
- There is a proposal that cuts the amount a seller can contribute towards your closing costs from 6% to 3% (standard practice for contracts in the DC Metro area are 3% already).
In January 2012, FHA loans accounted for almost 10% of the sales in Arlington County. Overall, FHA loans account for about 16% of sales in Northern Virginia.