January 2009 the minimum downpayment will change to 3.5%.

Please be advised! There was a mistake as to the dates of change for the down payment requirements for FHA. As of January 2009 the minimum downpayment will change to 3.5%. What did change on October 1, 2008 was the risk based mortgage insurance. Today it’s a pre-paid amount of 1.75% up from 1.5% for MIP, either financed or pre-paid at closing. The annual rate of .55% up from .50% applies for the monthly mortgage insurance. This is still a discounted rate when compared to conventional mortgage insurance at .78% and the minimum down payments are much lower. Conventional financing still requires 10% down to avoid MIP and the interest rates are higher. Thanks for keeping this in mind.