The Federal Housing Administration will require new borrowers to have a minimum FICO score of 580 to qualify for its flagship 3.5 percent down-payment program – and those with scores of less than 500 will no longer qualify for FHA-insured mortgages. The FHA is seeking public comments on several policy changes aimed at bolstering its depleted capital reserves.

The Federal Housing Administration today announced new regulations to further protect itself from depletions in its insurance funds, including raising the minimum net worth requirement of all FHA-approved lenders from $250,000 to $1 million. The new requirement is effective immediately for all new lender applicants for FHA programs.

The Federal Housing Administration has withdrawn its approval of Atlanta-based RSA Financial, Inc. and 1st Alliance Mortgage LLC of Houston, Texas – preventing the two lenders from originating and underwriting new FHA-insured mortgages. The two lenders are also prohibited from participating in the FHA single-family insurance program.

During the first nine months of 2009, there were 479,622 claims filed and granted for the first-time homebuyer tax credit, led by California, Florida and Texas, reported the Internal Revenue Service in its newly-released data book for fiscal year 2009. The claims amounted to $3.58 billion in credits, the IRS data shows. California and Florida, two of the hardest hit states in the ongoing foreclosure crisis, accounted for 22 percent, or nearly one quarter, of the total first-time homebuyer tax credits.

The chief of the Federal Housing Administration insisted before a Congressional panel that his agency is not the next housing domino to fall, and that the FHA is on sound financial and policy footing as a result of tougher new rules for borrowers. The FHA helps reduce lenders’ exposure to risk of default by insuring almost 30 percent of home purchases and 20 percent of refinances.

Winter storms had some impact, but a 7.6 percent drop in the pending home sales index for January from the National Association of Realtors indicates expanded and extended homebuyer tax credits are not bolstering the housing market. The NAR index is based on contracts signed in January. It fell to 90.4 from an upwardly revised 97.8 in December. But it is 12.3 percent higher than January 2009 when it was at 80.5.

Home prices stabilized in the fourth quarter of 2009, with the national median at $172,900 — 4 percent below the same quarter a year ago — but it’s the smallest decline in two years. The survey by the National Association of Realtors on the latest quarter’s existing home sales show some promise, with a larger number of metropolitan areas seeing prices jump from a year earlier.

The Internal Revenue Service this month is expected to begin processing the new form for those eligible to claim the first-time homebuyer tax credit, or for those long-term homeowners who can also qualify for a credit under certain conditions. The IRS Form 5405, along with related instructions, was released last month for the 2009 tax year. The agency has also provided more helpful information to avoid confusion brought about by the Obama Administration’s extension and expansion of the popular credit in November.

They seem to be coming more frequently – studies or hard numbers showing the foreclosure crisis is nowhere near peaking. The latest sobering report shows that Florida’s filings reached nearly 400,000 for 2009 and the state is overrun with a backlog of 800,000 foreclosure cases. In another report, the Federal Housing Administration, which provides mortgage insurance on loans made by FHA-approved lenders, reported that about 9.1 percent of FHA borrowers were delinquent at least three payments in December, up from 6.5 percent a year ago.

Pending sales of existing homes have stabilized, with a modest 1 percent increase in a key housing market index for December that remains above year-ago levels, according to the National Association of Realtors’ forward-looking measure of activity. Based on contracts signed in December, the pending home sales index rose from 95.6 in November to 96.6.