FHA is considering changing some of its criteria.  Right now buyers receive/qualify for the following:

3.5% minimum down payment; buyers can request up to 6% of sales price to be paid by the sellers towards the buyer’s closing costs, and 600 minimum credit score (sometimes lower, but usually won’t get approved if lower than this).

New rumored changes to be proposed are:  5% minimum down, only 3% towards closing cost assistance by sellers, and a credit score of 620+.  No word on when this will be formally proposed or approved; however, we are hearing early next year (just a few weeks away) and it will be much harder to qualify and more costly to buyers going forward. 

Additionally, current interest rates for qualifying buyers are under 5% - with the weak dollar/economy, interest rates are also rumored to be increasing – possibly substantially next year.

Finally, the first time buyer tax credit ($8,000) was extended through contract dates of 4/30/2010 (must close before 6/30/2010).  The extension/amended plan also allows for other home buyers had previously owned their homes a minimum of 5 years, to qualify for a separate tax credit of up to $6,500.

If you are still interested in buying, we may want to step things up a bit before these changes hit – it will save you quite a bit of money and provide some additional tax benefits.