FHA Changes Coming Soon Make Home Purchase More Expensive

Planning on buying a home soon, and getting an FHA loan, so you only have to put 3.5% down? Pay attention, because there are new FHA changes going into effect soon that will make that purchase much more expensive.  It will be important for anyone considering getting an FHA loan to move quickly so they avoid one or both of the increases.

The first change, taking effect on April 1, 2013, is the increase in the mortgage insurance premium (MIP) for most new mortgages by 10 basis points. That means that the government’s annual cost to the buyer for obtaining the loan will rise from 1.25% to 1.35%. Doesn’t seem like much? Think about that increase over the life of a loan. It could be a substantial amount of money over time.

The second change starts on June 3, 2013 and it will no longer allow you to cancel the MIP. Currently, once your loan-to-value ratio hits 78% you can stop paying the MIP. The government figures that you’ve got enough money invested that you aren’t as high of a risk for foreclosure. Under the new change you’ll have to carry the MIP for the life of the loan. Essentially this is a monthly charge for having the loan. It doesn’t help you pay down your principal or loan amount in anyway, so it makes the FHA loan more expensive.

Why all the increases? They are a way for the FHA to begin rebuilding its reserve funds after experiencing large losses over the last decade due to foreclosures. Most importantly for buyers though is to know that these changes make an FHA loan a fairly expensive option compared to a conventional loan. It is important when shopping for a lender, or speaking to the lender you’ve chosen, to understand the difference in payments and overall cost of the loan. Or you can make sure to act quickly and buy your home prior to the changes taking place.


  1. Joyce Malone
    Posted Apr 22 at 4:37 pm |

    Hello, I am a realtor in Las Vegas with a client looking in the north and northwest area. Does Beazer have any homes at the price point $160?
    Thank You,

    Joyce Malone
    Realty One Group
    1333 N. Buffalo #190
    Las Vegas, Nv 89128

    • Beazer Homes
      Posted Apr 30 at 5:54 pm |

      HI Joyce – Sorry for the delay. We had a lot of comments get sent to spam for some reason. I”m having someone from our local LV office reach out to you asap. Thanks for your patience – Lyndsey

    • jodi thornton
      Posted May 9 at 2:19 pm |

      Id like to get a small home two bedrooms starter home cheap

      • Beazer Homes
        Posted May 13 at 3:11 pm |

        Where are you looking, Jodi?

  2. Judy
    Posted Apr 28 at 9:02 pm |

    With a FHA loan, home costs 230,000.00 how mush money will the government give me on the loan and how much down payment will I need.

    • Beazer Homes
      Posted Apr 30 at 5:51 pm |

      If you qualify for an FHA loan you will need to put down 3.5% and the lender to you choose will cover the rest plus fees and other expenses. Do you have a particular home in mind? Reach out to me at or contact us on our website here – Thanks! Lyndsey

  3. frank
    Posted May 1 at 6:22 pm |

    Your company has other floor plans shown on your website but does not included them in the area I like to live in. Why?

    • Beazer Homes
      Posted Jun 4 at 9:44 am |

      Hello Frank! Thanks for your comment. We”d like to help. Where are you currently looking?

  4. vanessa carreon
    Posted May 16 at 3:52 pm |

    So if I am currently locked in to buy a home from you our lender is telling us our MIP will not go away when we hit the 79% mark is this true even though we are already locked in before this change takes place June 3rd? We were under the impression this would go away when we hit 79%.

  5. Mary Henderson
    Posted Jun 5 at 3:15 pm |

    Hi I am a retiree looking in the Northern Virginia area for a townhouse. I note that your townhomes are pricy, but beautiful, especially the newer ones. Do you have my price range maximum amount of $150.00. I do not prefer retirement communities. Thanks.

  6. Mary Henderson
    Posted Jun 5 at 3:18 pm |

    I prefer Stafford, Virginia as I have family there. Thank you.

  7. Mary Henderson
    Posted Jun 5 at 4:56 pm |

    I am a retiree looking to relocate to northern Virginia. I am interested in purchasing a townhouse. My price range is around $150,000. I noticed that you have beautiful new homes on your web and they are well above my price range. Do you have anything in the above mentioned price range?T

    • Beazer Homes
      Posted Jun 6 at 10:39 am |

      Hi Mary – Thank you for your interest in our Virginia communities! We’re forwarding your inquiry to one of the new home information managers local in your area. He’ll be able to talk to you more about your specified price range and help you find a community that will fit your lifestyle.

  8. Mo
    Posted Jun 8 at 4:54 am |

    Hi, I live in Palmdale, California and next year I want to purchase a home. Beazer currently has the Silver Leaf and Copper Leaf Home Communities in Palmdale which I love. I would like to know if Beazer will be building anymore communities in Palmdale between now and 2014? Thanks

    • Beazer Homes
      Posted Jun 19 at 2:30 pm |

      Hi Mo! Unfortunately, we probably won’t be building another community in Palmdale for another year. We have land held there and are hopefully looking to develop it late 2014. Thanks for your interest in Beazer!

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