Are you planning on buying a home in the Raleigh area and getting an FHA loan?  FHA loans are one of the few mortgage products still available with relatively modest down payment requirements.  That will change somewhat on January 1, 2009.

Currently, FHA regulations require a borower to make a 3% total investment in a home purchase.  A little more that 2% is required to go toward down payment and the balance can go towards closing costs.

After January 1, the minimum required investment will be 3.5% and the whole amount must go towards down payment.  This means that closing costs will be required in addition to the 3.5% down payment.

It has been my experience, especially in recent months, that an FHA loan is sometimes the best alternative for first time home buyers because of the low capital investment required.  With this rule change, the amount required will increase by almost 1.5%.  That’s a $3,000 capital investment increase on a $200,000 home purchase.

If are planning on buying a home in the Raleigh area in the near future, and have limited funds to invest, you may want to get closed before the end of the year.  Selection is good right now and prices are soft, so this could be a good time to make your move.

Special thanks to Tom Deadmore at www.TomDeadmore.com for the tip on the rule change.