FHA is making some changes that will impact buyers.  Starting April 1st, 2010 FHA will change the minimum down payment for credit scores that are under 580.  FHA will now require 10% down for these borrowers. Since they are the only investor who offers this type of financing, I expect their 21 days in underwriting to increase to over 40 days.  The second change will be with the Up Front Mortgage Insurance Premium.  Currently FHA requires 1.75% of the loan amount to be financed (or paid up front in cash) on top of the loan amount.   FHA will now require 2.25% Upfront Mortgage Insurance Premium and can make this change without Congress’s approval.  FHA also requires Monthly Mortgage Insurance Premium at a rate of .55%.  However, FHA cannot make changes to the Monthly Insurance Premium without Congress’s approval.  It is believed by many that FHA will ask Congress to approve a higher Monthly Mortgage Insurance Premium and then lower the Up Front Mortgage Insurance Premium in order to balance out the need for an increase.  These increases are need to off set losses that FHA is taking as one of the last loan products that allows borrowers a financing option over 95% Loan to Value and Cash Out Refinances to 85%.  Conventional loans have cut back their lending limits to the point that FHA is the last loan program for many borrowers.  VA and USDA also have higher Loan to Value ratios, but these are limited to buyers who are either Veterans or who live in specific USDA approved locations.  FHA loans do not have these restrictions.  These changes are needed in order to keep FHA going and preserve FHA loans for the future.