The passing by an overwhelming majority today by the Senate (93-1) is a bit of very good news for both homeowners and the mortgage industry.
Here is how things would change for the FHA programs based on the way the bill is currently written:
1. It raises loan limits to 100% of median home price by area, up to the conforming loan limit, currently $417,000.
2. It lowers and streamlines the downpayment requirement to 1.5% from where it currently is at 3%
3. Simplifies procedures for lending on condominiums. Prior rules made FHA lending on Condos very difficult.
4. Reverse Mortgage Enhancements: Expands the Home Equity Conversion Mortgage (HECM) Program maximum loan to a national level of $417,000 the current conforming loan limit, and lowers fees from 2% to 1.5%
-Enhanced Counseling programs, including post purchase counseling for homeowners having trouble making payments
-Alternative Credit Scoring Pilot Program - establishes a pilot to test scoring of persons with little documented credit, making use of alternative credit references, such as rental payments and utility bills.