Premiums for FHA Loans could be going down for first-time home buyers.
New legislation, called the Housing Financial Literacy Act of 2019, has been approved by the U.S. House of Representatives. FHA Loans are backed by the Federal Housing Administration and have been developed to help consumers who don’t have a large down payment, such as first-time buyers. With these types of loans, home buyers can generally have a lower down payment.
Under the new legislation, if approved by the U.S. Senate, first-time buyers could get a discount of 25 basis points out of their mortgage insurance premium. To qualify, they would need to go through a Department of Housing and Urban Development-certified counseling session on being a home owner. The session would help home owners get a better grasp of saving, budgeting, managing credit and more.
Now that the House has approved the bill, it has been sent to the Senate for review.
Boosting the benefits of the FHA Loan program would greatly benefit home buyers. The program not only offers more lenient down payment requirements, but it also allows for some bumps in the road in your credit score. Generally speaking, credit scores of 600 or higher are accepted, as there are more lenient terms when it comes to debt ratios.
We’ll keep you updated on any news about the Housing Financial Literacy Act of 2019. If you are thinking that an FHA Loan might be the loan program for you for purchasing real estate in the Seattle/Renton/Tacoma areas, make sure you contact one of our mortgage consultants today! We will take the time to get to know you and your unique financial picture.