HUD Secretary Shaun Donovan made it official last week: Applicants for FHA insured mortgages in the coming months are going to be hit with higher costs and tougher credit standards. In congressional testimony, Donovan said some of the changes are likely to include the following:

Higher downpayments will now be required. The current minimum is 3.5 percent. Donovan didn’t say how much higher the agency might push it, but congressional critics want to see at least a five percent minimum. Number two: Look for FHA’s generous “seller concessions” to be cut in half — from the current six percent to three percent of the loan amount — and maybe even lower.

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