As of new FHA Case numbers issued on Jan 1. The down payment requirement will increase to 3.5%. Before that it was a 3% investment into the transaction of which 2.25% could be a down payment. The available seller's concession will stay at 6% and that 3.5% can be a gift from a family member. The only real significant rule change that happended over the summer was that seller funded down payment assistance was eliminated. Other than that some banks have tightened up on the FICO scores they will lend to (pretty much everyone will entertain over 580). Sounds like there may have been soem other issues on your buyers end

My understanding from a conference I just attended is that FHA changes that take effect on Jan. 1, 2009 will make "100%" financing even harder to get. At that time, most buyers using FHA loan will have to have cash for a down payment. I would suggest calling a loan officer in your area and have them explain it clearly to you. This is a difficult time to sell as you know and there just is no definate way to know when it will get better. There are a lot of different things you can do to try to sell your house: is it priced correctly, staged appropriately, being advertised enough, open houses held, etc Please let me know if you need some more suggestions! Good luck!