I hear that the FHA loans are now better.  What are the changes?

The Housing and Economic Recovery Act of 2008 made changes to the FHA loan.  As of October 1, 2008, an FHA loan can be obtained with a minimum 3% down payment.  You can also refinance for up to 97% of your home's value but this is only available up through October 1, 2008.  After that  it is 96.5%.  In addition, the FHA allows seller concessions of up to 6% of your home's purchase price so that can certainly help with your negotiations with the seller in order to cover your closing costs. 

The most important thing about the FHA loans is the amount.  The FHA  insured loan will be increased to 115% of the area's medium home price up to a maximum of $625,500.  That should substantially increase the availability of those mortgage funds in areas such as Boston where home prices are amongst the highest in the nation.

If you have questions about this or any other real estate matter, please contact Tom Bennett at (617) 531-6574 or tvb@barronstad.com.