The New York Times reports that the FHA will charge higher fees to buyers seeking mortgages, to restore depleted reserves. http://www.nytimes.com/2012/02/28/business/fha-raising-its-mortgage-fees.html. In the current environment, many buyers have been seeking FHA mortgages (40% of all new mortgages in 2010). The FHA does not make loans; it only insures them. But its underwriting standards allowed people with a credit score of 580 or more to put down as little as 3.5 % of the purchase price, according to the article.
For those who have better credit or who can put more money down, a conventional loan may be better. But for many, FHA loans are the best game in town.
The increase in fees will be .1 % to .35 % of the loan amount with additional charges planned in the future.