Tiered Pricing and FHA Loans
August 30, 2009 by Eleanor
Filed under FHA Mortgage Loans, First Time Home Buyer
There are many many rules that define who many discount points we can charge, or how much money we can earn in commissions in North Carolina. But FHA has ADDITIONAL rules regarding pricing.
FHA’s Tiered Pricing Rules FHA’s Tiered Pricing Rules prohibit a lender from charging higher prices (discount points) for low balance loans than the lender charges for higher balance loans. A lender’s customary lending practices may not provide for a variation of more than two discount points (2.00%) charged on its FHA mortgages within a geographic area. In addition, any variation within two points must be based on actual variations in fees or costs to the lender to make the loan. Mortgagee Letter 1994-16 provides guidance to lenders with respect to tiered pricing rules. Additional guidance regarding pricing with respect to overages and yield spread premiums can be found in Mortgagee Letters 1994-43 and 2001-26.
If you are considering purchasing a home in Cary, NC with FHA financing, please contact Steve and Eleanor Thorne, we have the best rates! 919-649-5058
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