With the demise of creative financing, FHA loans are in vogue again, and in some cases are even being used by buyers who have the 20% down for a conventional loan. I found it pretty interesting to read the following two articles.
FHA on track for busiest year as it backs 23% of mortgages
With less than a month to go in the 2009 fiscal year, the FHA is on pace for its busiest year.
From Oct. 1 through mid-August, applications for FHA single-family-home mortgages were up 50%, to 2.52 million, from the same period a year earlier.
FHA Likely to be the Next Shoe to Drop
The FHA is a big reason that home prices haven’t fallen even further. The FHA’s aggressive lending programs have continued throughout the housing downturn, causing its market share of the mortgage industry to grow from 2% in 2005 to 23% today. The FHA is an even larger percentage of the new home mortgage industry, with nearly 25% market share, according to HUD.
The FHA insurance fund, however, is likely running dry. According to a report from mortgage finance experts (click here to read the report), the FHA will not meet its minimum requirement as of its fiscal year-end, which is only 27 days from now.
It’s curious to see that the FHA program may actually have a few issues which need to be addressed.
Any lenders care to weigh in on what you hearing about FHA loans?
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I’ll be your huckleberry! FHA loans have certainly been the home loan of choice for first time buyers in Arizona. However, conventional loan programs are making a come back. Many first time buyers are shopping in the 100k sales price range. The problem is that investors are also shopping these properties. Ultimately this has made it very difficult for first time home buyers to get their offers accepted. Most investors are paying cash, however there are a handful of investors that are utilizing conventional loan programs to purchase property. In any event, it’s always a good idea for buyers to fully research all Phoenix home mortgage programs prior to getting pre-approved.
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Blair, I was listening to a lender speak yesterday that was saying that jumbo loans and ARMS were making a comeback, too? Are you seeing the same thing?
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Hello Dru,
I have seen certain jumbo and ARM loans come back. However, underwriting guidelines still require full documentation of income, assets and employment.
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