As rampant inflation gradually gets squeezed out of home prices, many first-time homebuyers are finally able to afford a house. Lower rates on purchase mortgages-including popular FHA mortgage products-also make it easier for new homebuyers to take the ownership plunge.
FHA Loans Articles
The FHA was supposed to lead the U.S. mortgage industry out of crisis, but rising defaults are prompting the agency to tighten up its lending standards.
Although they fell from favor (and nearly off the radar) during the last real estate run-up, FHA and VA mortgage products are now grabbing powerful market share. Government-backed loans currently account for about a third of all mortgage applications in the U.S.
Companies offering private mortgage insurance (PMI) are suffering catastrophic losses due to an avalanche of foreclosure-related claims. But the FHA, which offers HUD-backed FHA loan guarantee reassurance to banks and investors, is quickly capturing that lost PMI market share.
Jumbo mortgages are larger-than-normal mortgages that are used to pay for, or refinance, higher-cost homes. The Federal Housing Administration (FHA) began insuring these big loans this year, at least on a temporary basis, as part of the government's much-touted economic stimulus package.