Reminder about FHA Mortgagee Letter 2008-23 that has revised downpayment requirement as described throughout this mortgagee letter takes effect with all new FHA case number assignments on or after January 1, 2009.
September 5, 2008
MORTGAGEE LETTER 2008 - 23
TO: ALL APPROVED MORTGAGEES
SUBJECT: Revised Downpayment and Maximum Mortgage Requirements
The Housing and Economic Recovery Act of 2008 revised the National Housing Act to:
Require that the mortgagor “shall have paid, in cash or its equivalent…an amount equal to not less than 3.5 percent of the appraised value of the property….”;
Eliminate the variable loan-to-value limits that were based on the combination of the property value and the average closing costs of the State where the property is located (also known as “downpayment simplification”); and
Limit the total FHA-insured first mortgage to 100 percent of the appraised value, and require the inclusion of the upfront mortgage insurance premium (UFMIP) within that limit. This mortgagee letter provides guidance to mortgagees regarding the revised downpayment and maximum mortgage requirements for single family mortgage to be insured by FHA.
The entire Mortgagee Letter can be reviewed at http://portal.hud.gov/pls/portal/docs/PAGE/FHA_HOME/LENDERS/MORTGAGEE_LETTERS/2008_MORTGAGEE_LETTERS/08-23%20REVISED%20DOWNPAYMENT%20AND%20MAXIMUM%20MORTGAGE%20REQUIREMENTS_3.DOC
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