New FHA Credit Requirements Turn Up the Heat on Borrowers

Ever since the housing crisis hit, homeowners unable to secure loans from private lenders -- which have gone back to requiring the traditional 20 percent down payment -- have relied on government-insured loans offered for as little as 3.5 percent down. Now the Federal Housing Administration (FHA) is tightening its belt by making the credit requirements for such loans more stringent. In 2009, defaults on FHA loans surpassed 9 percent, up from 6.8 percent the