WABroker

Earlier this year, the Federal Housing Administration announced some changes to their lending policies.

FHA changes require a 5% down payment, instead of the 3% required previously. In addition, the FHA will now limit seller concessions to 3%, instead of 6%. This means that sellers are only allowed to pay the buyer's closing costs up to 3% of the purchase price.

The bottom line is that home buyers better bring more money to the table if they want FHA financing. Homeowners must have more cash for an FHA down payment and money left over to cover the closing costs. With title company fees, taxes, survey fees, appraisal fees, and insurance premiums, closing costs can add a lot to the total mortgage expenses.

Some real estate experts worry that these changes make it more difficult for first time home buyers to purchase property. This is a valid concern since the FHA helps buyers purchase a home who otherwise would not have the opportunity to do so.

However, more conservative policies will be better in the long run because putting people in houses that they cannot afford will not help anyone.