USDA and FHA make changes to mortgage programs
Posted March 6, 2012
Job reports are the big focus this week. Commodity price increases in oil and cotton are continued concerns for a still fragile economy trying to recover.
Morgan Stanley announced today that they expect QE3 will arrive sometime late spring/early summer. The recent run of positive economic data had seemingly diminished chances of QE3, but we’re now seeing signs that QE3 may indeed become a reality. As you may remember, the idea behind further easing is to help drive rates lower, which would certainly be music to everyone in Triangle housing.
USDA has launched a new pilot program, one which provides a more streamlined approach to refinancing existing USDA loans for borrowers who have been current on their mortgages for the past twelve months. This is a new program that is being tested in nineteen states. Here are a couple of stipulations for the new program.
- Interest rate for the new loan must be a minimum of 1% lower than the existing USDA Loan.
- North Carolina is one of the Pilot States.
- New loan may only include the principal balance of the existing loan and the upfront guarantee fee.
- Closing costs and other closing fees may not be financed into the new loan.
Also today, the Obama administration announced a new FHA mortgage plan aimed at saving certain eligible FHA borrowers approximately $1,000 a year. This is being done through a reduction in the FHA Upfront Mortgage Insurance Premium and applies to those FHA mortgages that were originated and closed prior to June 1, 2009.
For more details on these two new programs, please contact your local Mortgage Lender.