When do new FHA mortgage rules kick-in? TODAY!

The Federal Housing Administration (FHA) recently announced new qualification rules for homeowners applying for FHA-backed mortgages. Pundits and journalists alike are debating these new rules and their possible effects when they go into effect sometime next year. What nobody seems to realize, however, is that lenders are already applying the new rules and the effect is going to be an almost immediate housing DE-stimulus from the government.

I'm not at all saying that these changes aren't appropriate for FHA, which had become the last bastion of sub-prime lending. I am saying that raising downpayment requirements above 3.5 percent, increasing minimum credit scores, and increasing premiums for mortgage insurance can only have a chilling impact on the low end of the market -- the only segment other than foreclosures or short sales to see much action lately.