Mortgage Lending Getting More Stringent?

Over the past 2 weeks I have come across one article after another regarding the difficulty to obtain a mortgage. While this is nothing new in the real estate lending world of today, we are now faced with another huge obstacle to climb - a depleted FHA fund.
According to the National Association of Realtors, FHA financing was obtained by 40% of home buyers. That is a huge number for one lending program, yet a positive one to maintain the proper balance of housing inventory levels.
The FHA capital reserve fund has gone below statutory minimums. What does this mean? A change in the FHA guidelines is inevitable. The change may consist of one (or all) of the following: more money down required from the borrower, less seller contributions, a higher MIP, and possibly not allowing the up front MIP to be financed. Of course, NAR strongly opposes any drastic and sudden change, as this could eliminate a large percentage of home buyers.
Now, couple this with Fannie Mae and Freddie Mac guidelines that continue to get more conservative, and a flow of bank-owned foreclosures to hit the market, and values could fall even more.
As a home buyer, it is still an excellent time to buy. Work closely and early with your real estate professionals to ensure you are up to date in program guidelines, and form a tight budget to enable more savings for your home purchase.
As a real estate professional, keep in touch with the latest industry changes by going to your member access site for the National Association of Realtors. While change is coming, we can be prepared and ultimately the lending market will self-adjust.