Thanks for visiting The Mortgage Reports. To stay absolutely current on mortgage markets and important guideline changes, be sure to take my free daily email alerts.

Mortgage guidelines are in constant flux.  Or at least it seems that way.  And too often, rumors of "what's coming" take on a life of their own, spilling over into media coverage and into the minds of the homebuying public.

A classic example of this was the fabled "$15,000 homebuyer tax credit" from 2008.  It was an idea that passed the Senate and got good headlines but, ultimately, died in Congress.  Not before the news went mainstream, however.

The most recent rumor involves FHA mortgage insurance premiums.

The image above is a snippet from page 348 of the Special Topics sub-section in the Budget of the United States Government, Fiscal Year 2011.  Among other things, the text recaps the FHA's recent response to its own dwindling reserves and rising risk levels.

The FHA's new guidelines effective April 5, 2010 are highlighted, too.

Now, when the FHA passed its new guidelines (13 days ago), it said that it would petition Congress for the right to raise its mortgage insurance premiums because, by statute, the FHA doesn't have that authority.  According to the highlighted text, the FHA wants to make two changes:

1. Lower the Upfront Mortgage Insurance Premium from 2.250% to 1.000%
2. Raise the Monthly Mortgage Insurance Premium to 0.85% on most mortgages

This is where the rumors starts.  Just because the FHA asks for control over its own mortgage insurance doesn't mean that Congress will grant it. Nor does it mean that the FHA won't deviate from its original plan should Congress accede to the FHA's request.

In other words, the MIP changes are just a wish list. Reality is much different.

For now, starting April 5, 2010, the FHA increases its upfront mortgage insurance premiums to 2.25%, raises its minimum FICO score requirements to 620, and reduces its allowable seller concessions to 3 percent.

These are the facts. Homebuyers, loan officers and real estate agents should plan accordingly.

If you're buying a home and thinking of going FHA, be sure to talk to your loan officer about your personal timeline and how the new FHA guidelines may affect you.  Or, if you don't have a loan officer, and we can talk about your situation.  My bank underwrites FHA-backed mortgage in-house and our rates are low.

Plus, I love to work with my readers.

(Image Courtesy: WhiteHouse.gov; h/t Holden Lewis)

Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.