USA - FHA Lending Activity for Homes is Needed For Economic Recovery

[sharon sanders]

In my opinion FHA lending expansion is needed for economic recovery. Many homes distressed properties fail the FHA inspection requirement resulting in many low and moderate income persons being locked out of the home market.


FHA Lending Activity in the Past Decade: A National Overview
Saturday, May 21, 2011


snip

The increase in FHA volume appears to come from two sources. First, some purchasers who might have gotten subprime loans mid-decade are now getting loans from the FHA.10 However, the increase in FHA volume cannot be attributed solely to a return of borrowers who might have found subprime a more attractive option mid-decade. The credit score distribution of recent FHA borrowers11 suggests that, with the tightening of the credit market, some borrowers who might in the past have gotten prime conventional loans may not be able to do so and are turning to the FHA as an alternative; that is, much of the FHA?s increased market share is crisis driven.

http://www.philadelphiafed.org/comm...pecial-reports/FHA-lending-activity/index.cfm

 

[Emily]

Re: USA - FHA Lending Activity for Homes is Needed For Economic Recovery

HUD is still financing brand new, roomy single family homes targeted towards people making 45K or less, though a sign I saw said there were options for people making bigger salaries, too.

Why are they doing this when there is tons of 'used' inventory available held by citizens who had no government help in purchasing their property? They are just running down home prices even more. Near one of these recently completed HUD developments, there is another one built during the height of the boom where HUD is selling foreclosures for half of what they originally sold for, once again depressing prices in the neighborhood. These are large homes that were priced close to 300K at the peak of the boom, and I wonder why HUD is even involved in that kind of housing.