FHA says as many as 50,000 mortgages will be affected by new lending rules

Two weeks ago, the FHA took steps to limit risk to its single-family portfolio, announcing that it will flag some loans for manual underwriting. FHA’s Chief Risk Officer Keith Becker told the WSJ just how many loans the agency thinks will be affected, adding that the FHA felt that it was appropriate to take some steps to mitigate the risks we’re seeing.

FHA Loan Changes for Kentucky Home Buyers in 2019

 

Two weeks ago, the Federal Housing Administration took steps to mitigate risks to its single-family portfolio, announcing updates to its TOTAL Mortgage Scorecard that will flag some loans for manual underwriting.

The move upset a number of lenders who feared that some of their borrowers would be shut out of FHA financing and that borrowers who began the process but no longer qualified under new guidelines would be angry.

Turns out, their fears have some merit.

An FHA official told The Wall Street Journal that approximately 40,000 to 50,000 loans a year will likely be affected, which amounts to about 4-5% to all the mortgages the FHA insures on an annual basis.

“We have continued to endorse loans with more and more credit risk,” said FHA’s Chief Risk Officer Keith Becker. “We felt that it was appropriate to take some steps to mitigate the risks we’re seeing.”

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%.

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But the agency’s annual report to Congress released in November revealed risk trends that threatened to drain the program, among them a significant increase in cash-out refinances, a drop in average borrower credit score, and a jump in borrowers with high DTIs.

Requiring manual underwriting for riskier loans is intended to curb these risks, and there’s a good chance a number of borrowers will no longer qualify.

According to Becker, it’s likely that many of the loans flagged for manual underwriting won’t end up passing muster.

 

 

Source: FHA says as many as 50,000 mortgages will be affected by new lending rules

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FHA eliminates two unnecessary and outdated lending roadblocks

The Federal Housing Administration has taken steps to reduce some of the regulatory burdens that belabor the lending process, releasing two mortgagee letters Tuesday with updated guidelines on home warranty and inspection requirements for single-family FHA loans. FHA Commissioner Brian Montgomery said the moves align with the administration’s goal streamline and update guidelines in an effort to reduce regulatory barriers.

Source: FHA eliminates two unnecessary and outdated lending roadblocksKentucky FHA Guidelines for Inspections and Warranty's

2012 FHA LOAN LIMITS FOR KENTUCKY COUNTIES

2012 FHA Loan Limits for Kentucky Counties

1 – FAMILY is a single family home or condominium
2 – FAMILY is two separate living units (duplex)
3 – FAMILY three separate living units (triplex)
4 – FAMILY four separate living units(fourplex)

Kentucky Counties One-Family Two-Family Three Family Four-Family MSA
Adair County $271,050 $347,000 $419,425 $521,250 NON-METRO
Allen County $271,050 $347,000 $419,425 $521,250 NON-METRO
Anderson County $271,050 $347,000 $419,425 $521,250 FRANKFORT, KY (MICRO)
Ballard County $271,050 $347,000 $419,425 $521,250 PADUCAH, KY-IL (MICRO)
Barren County $271,050 $347,000 $419,425 $521,250 GLASGOW, KY (MICRO)
Batd County $271,050 $347,000 $419,425 $521,250 MOUNT STERLING, KY (MICRO)
Bell County $271,050 $347,000 $419,425 $521,250 MIDDLESBOROUGH, KY (MICRO)
Boone County $337,500 $432,050 $522,250 $649,050 CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA)
Bourbon County $271,050 $347,000 $419,425 $521,250 LEXINGTON-FAYETTE, KY (MSA)
Boyd County $271,050 $347,000 $419,425 $521,250 HUNTINGTON-ASHLAND, WV-KY-OH (MSA)
Boyle County $271,050 $347,000 $419,425 $521,250 DANVILLE, KY (MICRO)
Bracken County $337,500 $432,050 $522,250 $649,050 CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA)
Breatditt County $271,050 $347,000 $419,425 $521,250 NON-METRO
Breckinridge County $271,050 $347,000 $419,425 $521,250 NON-METRO
Bullitt County $302,500 $387,250 $468,100 $581,750 LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA)
Butler County $271,050 $347,000 $419,425 $521,250 NON-METRO
Caldwell County $271,050 $347,000 $419,425 $521,250 NON-METRO
Calloway County $271,050 $347,000 $419,425 $521,250 MURRAY, KY (MICRO)
Campbell County $337,500 $432,050 $522,250 $649,050 CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA)
Carlisle County $271,050 $347,000 $419,425 $521,250 NON-METRO
Carroll County $271,050 $347,000 $419,425 $521,250 NON-METRO
Carter County $271,050 $347,000 $419,425 $521,250 NON-METRO
Casey County $271,050 $347,000 $419,425 $521,250 NON-METRO
Christian County $271,050 $347,000 $419,425 $521,250 CLARKSVILLE, TN-KY (MSA)
Clark County $271,050 $347,000 $419,425 $521,250 LEXINGTON-FAYETTE, KY (MSA)
Clay County $271,050 $347,000 $419,425 $521,250 NON-METRO
Clinton County $271,050 $347,000 $419,425 $521,250 NON-METRO
Crittenden County $271,050 $347,000 $419,425 $521,250 NON-METRO
Cumberland County $271,050 $347,000 $419,425 $521,250 NON-METRO
Daviess County $271,050 $347,000 $419,425 $521,250 OWENSBORO, KY (MSA)
Edmonson County $271,050 $347,000 $419,425 $521,250 BOWLING GREEN, KY (MSA)
Elliott County $271,050 $347,000 $419,425 $521,250 NON-METRO
Estill County $271,050 $347,000 $419,425 $521,250 NON-METRO
Fayette County $271,050 $347,000 $419,425 $521,250 LEXINGTON-FAYETTE, KY (MSA)
Fleming County $271,050 $347,000 $419,425 $521,250 NON-METRO
Floyd County $271,050 $347,000 $419,425 $521,250 NON-METRO
Franklin County $271,050 $347,000 $419,425 $521,250 FRANKFORT, KY (MICRO)
Fulton County $271,050 $347,000 $419,425 $521,250 UNION CITY, TN-KY (MICRO)
Gallatin County $337,500 $432,050 $522,250 $649,050 CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA)
Garrard County $271,050 $347,000 $419,425 $521,250 NON-METRO
Grant County $337,500 $432,050 $522,250 $649,050 CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA)
Graves County $271,050 $347,000 $419,425 $521,250 MAYFIELD, KY (MICRO)
Grayson County $271,050 $347,000 $419,425 $521,250 NON-METRO
Green County $271,050 $347,000 $419,425 $521,250 NON-METRO
Greenup County $271,050 $347,000 $419,425 $521,250 HUNTINGTON-ASHLAND, WV-KY-OH (MSA)
Hancock County $271,050 $347,000 $419,425 $521,250 OWENSBORO, KY (MSA)
Hardin County $271,050 $347,000 $419,425 $521,250 ELIZABEtdTOWN, KY (MSA)
Harlan County $271,050 $347,000 $419,425 $521,250 NON-METRO
Harrison County $271,050 $347,000 $419,425 $521,250 NON-METRO
Hart County $271,050 $347,000 $419,425 $521,250 NON-METRO
Henderson County $271,050 $347,000 $419,425 $521,250 EVANSVILLE, IN-KY (MSA)
Henry County $302,500 $387,250 $468,100 $581,750 LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA)
Hickman County $271,050 $347,000 $419,425 $521,250 NON-METRO
Hopkins County $271,050 $347,000 $419,425 $521,250 MADISONVILLE, KY (MICRO)
Jackson County $271,050 $347,000 $419,425 $521,250 NON-METRO
Jefferson County $302,500 $387,250 $468,100 $581,750 LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA)
Jessamine County $271,050 $347,000 $419,425 $521,250 LEXINGTON-FAYETTE, KY (MSA)
Johnson County $271,050 $347,000 $419,425 $521,250 NON-METRO
Kenton County $337,500 $432,050 $522,250 $649,050 CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA)
Knott County $271,050 $347,000 $419,425 $521,250 NON-METRO
Knox County $271,050 $347,000 $419,425 $521,250 NON-METRO
Larue County $271,050 $347,000 $419,425 $521,250 ELIZABEtdTOWN, KY (MSA)
Laurel County $271,050 $347,000 $419,425 $521,250 LONDON, KY (MICRO)
Lawrence County $271,050 $347,000 $419,425 $521,250 NON-METRO
Lee County $271,050 $347,000 $419,425 $521,250 NON-METRO
Leslie County $271,050 $347,000 $419,425 $521,250 NON-METRO
Letcher County $271,050 $347,000 $419,425 $521,250 NON-METRO
Lewis County $271,050 $347,000 $419,425 $521,250 MAYSVILLE, KY (MICRO)
Lincoln County $271,050 $347,000 $419,425 $521,250 DANVILLE, KY (MICRO)
Livingston County $271,050 $347,000 $419,425 $521,250 PADUCAH, KY-IL (MICRO)
Logan County $271,050 $347,000 $419,425 $521,250 NON-METRO
Lyon County $271,050 $347,000 $419,425 $521,250 NON-METRO
Madison County $271,050 $347,000 $419,425 $521,250 RICHMOND-BEREA, KY (MICRO)
Magoffin County $271,050 $347,000 $419,425 $521,250 NON-METRO
Marion County $271,050 $347,000 $419,425 $521,250 NON-METRO
Marshall County $271,050 $347,000 $419,425 $521,250 NON-METRO
Martin County $271,050 $347,000 $419,425 $521,250 NON-METRO
Mason County $271,050 $347,000 $419,425 $521,250 MAYSVILLE, KY (MICRO)
Mccracken County $271,050 $347,000 $419,425 $521,250 PADUCAH, KY-IL (MICRO)
Mccreary County $271,050 $347,000 $419,425 $521,250 NON-METRO
Mclean County $271,050 $347,000 $419,425 $521,250 OWENSBORO, KY (MSA)
Meade County $302,500 $387,250 $468,100 $581,750 LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA)
Menifee County $271,050 $347,000 $419,425 $521,250 MOUNT STERLING, KY (MICRO)
Mercer County $271,050 $347,000 $419,425 $521,250 NON-METRO
Metcalfe County $271,050 $347,000 $419,425 $521,250 GLASGOW, KY (MICRO)
Monroe County $271,050 $347,000 $419,425 $521,250 NON-METRO
Montgomery County $271,050 $347,000 $419,425 $521,250 MOUNT STERLING, KY (MICRO)
Morgan County $271,050 $347,000 $419,425 $521,250 NON-METRO
Muhlenberg County $271,050 $347,000 $419,425 $521,250 CENTRAL CITY, KY (MICRO)
Nelson County $302,500 $387,250 $468,100 $581,750 LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA)
Nicholas County $271,050 $347,000 $419,425 $521,250 NON-METRO
Ohio County $271,050 $347,000 $419,425 $521,250 NON-METRO
Oldham County $302,500 $387,250 $468,100 $581,750 LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA)
Owen County $271,050 $347,000 $419,425 $521,250 NON-METRO
Owsley County $271,050 $347,000 $419,425 $521,250 NON-METRO
Pendleton County $337,500 $432,050 $522,250 $649,050 CINCINNATI-MIDDLETOWN, OH-KY-IN (MSA)
Perry County $271,050 $347,000 $419,425 $521,250 NON-METRO
Pike County $271,050 $347,000 $419,425 $521,250 NON-METRO
Powell County $271,050 $347,000 $419,425 $521,250 NON-METRO
Pulaski County $271,050 $347,000 $419,425 $521,250 SOMERSET, KY (MICRO)
Robertson County $271,050 $347,000 $419,425 $521,250 NON-METRO
Rockcastle County $271,050 $347,000 $419,425 $521,250 RICHMOND-BEREA, KY (MICRO)
Rowan County $271,050 $347,000 $419,425 $521,250 NON-METRO
Russell County $271,050 $347,000 $419,425 $521,250 NON-METRO
Scott County $271,050 $347,000 $419,425 $521,250 LEXINGTON-FAYETTE, KY (MSA)
Shelby County $302,500 $387,250 $468,100 $581,750 LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA)
Simpson County $271,050 $347,000 $419,425 $521,250 NON-METRO
Spencer County $302,500 $387,250 $468,100 $581,750 LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA)
Taylor County $271,050 $347,000 $419,425 $521,250 CAMPBELLSVILLE, KY (MICRO)
Todd County $271,050 $347,000 $419,425 $521,250 NON-METRO
Trigg County $271,050 $347,000 $419,425 $521,250 CLARKSVILLE, TN-KY (MSA)
Trimble County $302,500 $387,250 $468,100 $581,750 LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA)
Union County $271,050 $347,000 $419,425 $521,250 NON-METRO
Warren County $271,050 $347,000 $419,425 $521,250 BOWLING GREEN, KY (MSA)
Washington County $271,050 $347,000 $419,425 $521,250 NON-METRO
Wayne County $271,050 $347,000 $419,425 $521,250 NON-METRO
Webster County $271,050 $347,000 $419,425 $521,250 EVANSVILLE, IN-KY (MSA)
Whitley County $271,050 $347,000 $419,425 $521,250 CORBIN, KY (MICRO)
Wolfe County $271,050 $347,000 $419,425 $521,250 NON-METRO