FHA the loan of choice amongst majority of buyers

Posted on April 1, 2009
Filed Under FHA Home Loans | Leave a Comment

FHA has become the loan of choice. A high percentage of new purchase loans are being issued by FHA lenders.  The main reasons being they allow a lower fico score than conventional loans and the down payment is only 3.5%.  + The seller can contribute up to 5% towards closing costs.

On the other hand it is causing a new problem.  The deliquency ratio of FHA loans has increased causing many people to believe this may be considered the new “sub prime”. By not requiring buyers to put down sizable amounts to purchase their home it brings into question the viability of the borrower.  Perhaps this is why we are seeing minimum fico score requirements on the rise.

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