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Effective April 5th 2010, FHA is implementing the following changes:

1. Upfront mortgage insurance premiums are increasing from 1.75% to 2.25% (this amount is financed to the loan amount).
2. Minimum down payments for applicants with FICO credit scores below 580 are rising to 10% (most lenders are already requesting minimum of 620).
3. Seller concessions are being limited from 6% to 3%.

FHA is trying to balance out between insuring loans to qualified buyers and protecting itself from more bad loans. In today's tightening underwriting guidelines, FHA is still the best product for those with 620 FICO score, 3.5% down payment (all of which can be gifted), collections need not be paid and reserves are not required.