Man oh man, times have changed in the world of home financing!
A couple of years ago, FHA insured loans were shunned. Conventional Sub-Prime Loans were as available as the air, to virtually every borrower. They allowed those with blemished credit and low down payments to purchase virtually any home they wanted to buy - well, almost.
Piggy Back Loans were also the rage! Using the Piggy Back Option, a borrower could take out a large loan for 80% of the home's market value, plus get an immediate second mortgage for as much as another 15%.
Fast forward to today - August, 2008!
FHA Loans are just about the only loan option for those with as little as 3% down payment, challenged credit, or those needing down payment assistance from family members or government agencies (Down Payment Assistance programs involving sellers making a contribution to a buyer's down payment - from firms including Ameridream, Nehemiah , and others - are scheduled for phase-out by October 1st of this year).
Here in Chicago, FHA Loan Ceilings have increased to a minimum of $410,000 (for single-family homes), and up to $788,500 for some multi-family properties making more borrowers candidates for the FHA option.
True, FHA has certain property condition requirements, and many condo associations still have by-laws, including a Right of First Refusal, which put a damper on the use of FHA loans. But, often, the FHA route offers a more secure, competitive-rate option for many.
Indeed, FHA Loan Applications are booming! Last week, the Mortgage Bankers Association released data indicating nearly one-third of all new loans involve FHA or other government-insured financing. One year ago, these loans accounted for only 8% of all new loans originated.
Many financing out of resetting adjustable rate sub-prime loans are also going the FHA route. Since June, 2007, FHA-insured re-fi loans have jumped 260%!
For more info, as well as a link to Mary Umberger's column in today's Chicago Tribune, view our post today at BlogChicagoHomes.com.
DEAN & DEAN'S TEAM CHICAGO
FHA is the way to go for most people. I do have people doing conventional loans too though.
It is crazy how the FHA loans are taking over the market. Of course its inception was the depression...
just thought you should know that there is a website dedicated to saving Downpayment assistance. the address is www.DPAGroundswell.org. This site contains an area where you can email comments/letter to your elected officials letting them know you want to help save DPA