FHA: New Lending Rules To Affect Nearly 50,000 Loans A Year
The fears from some lenders regarding the Federal Housing Administration's new rules that would mitigate risks to its single-family portfolio may be coming to fruition, according to a recent report from HousingWire.
"We have continued to endorse loans with more and more credit risk," said FHA’s Chief Risk Officer Keith Becker, according to the report.
"We felt that it was appropriate to take some steps to mitigate the risks we’re seeing."
The move will reportedly affect 4-5% of all mortgages the FHA insures annually. That equates to nearly 50,000 loans, according to the report.
"The WSJ points out that the move is a complete reversal of the agency’s 2016 decision to loosen underwriting standards, nixing an old rule that required manual underwriting for loans with credit scores below 620 and a debt-to-income ratio above 43%," according to HousingWire.
To learn more about the changes and what it could mean for lenders across the board, click on the image above.