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FHA Rolls Out Risk-Based Premiums

Posted on May 19, 2008

Ken Harney reports in the LAT: The FHA, which for decades has used a one-size-fits-all approach to pricing its insurance on home loans, plans to shift to a risk-based system keyed to FICO scores and down payments, beginning as early as mid-July. Private-sector lenders and insurers have priced interest rates and premiums using sliding scales of FICO scores and down-payment amounts since the mid-1990s.The agency's move, which will cover new applications including jumbo loans up to $729,750 in high-cost markets through December, will bring the FHA in line with the private sector's main approa...

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