The Federal Housing Administration—the government agency that insures about 30 percent of all new home loans—is going to make it a little harder and more expensive for you to get a government-backed home loan in the near future. 

            The FHA is raising its fees and tightening up on lending requirements as part of a plan to build up its dwindling reserves.  FHA reserves have dropped well below what Congress requires because of significant losses from the foreclosure crisis and declining property values.

FHA has become one of the few ways people can buy a home. Banks have clamped down on conventional mortgages but are more willing to make FHA loans because the government covers the losses if the borrower defaults. And borrowers can more easily qualify for FHA loans because they only need 3.5% down and can have lower credit scores.

            The agency will increase the premium it charges for its mortgage insurance and require home buyers with weaker credit scores to come up with larger down payments. The FHA will also reduce the amount of money a seller can provide a homebuyer for closing costs, as well as tighten its enforcement of lenders.

            Buyers still will be able to roll these additional costs into the mortgage in most cases.

            The changes are expected to take place in the first half of 2010.