The Federal Housing Administration will raise the minimum down payment for its least credit-worthy borrowers, the agency announced Tuesday.
The change is among a number of major changes the FHA is making to ensure its long-term financial soundness. Borrowers with credit-rating scores below 580 will be required to put down at least 10 percent. Those with a credit score above 580 will be able to continue to put down only 3.5 percent. The changes are intended to shore up the agency's finances.The FHA also will increase its upfront mortgage insurance premium from 1.75 percent to 2.25 percent. The agency is expected to seek congressional approval to raise annual mortgage insurance premiums, paid by borrowers over the life of the loan, above the current 0.55 percent maximum. The amount it will seek has yet to be announced.For more information on the FHA changes, inlcuding a summary of all changes, visit REALTOR.org.