The Federal Housing Administration recently announced that they are implementing some new policy changes to their FHA lending guidelines. With the continual plan to still provide an affordable mortgage product, the FHA is confident and hopeful that these new changes should support the housing market recovery, strengthen the FHA’s capital reserves, and start eliminating the risk of defaults. These new  FHA proposed changes are probably the most major steps the agency has ever taken to address the risk factor.  Since banks began tightening their lending guidelines and the sub-prime lending market disappeared, the demand for government insured mortgages greatly increased.