FHA HOME LOANS
The FHA was established in the 1930’s to insure residential real estate loans. It was designed to assist people (mostly first time home buyers) to get financing they otherwise might not afford. Only 3% down payment was required to qualify and gifts and grants can be used for down payments and closing costs. In their 70 years of business they have made over 34 million loans.
The FHA had a pretty stable percentage of the market for decades. Then, in the early and middle 2000’s the new ‘”creative” loan types came available that required nothing down. During that time frame the FHA insured few loans.
Now the FHA is on the rise. It is one of the most attractive loan programs available today. Also, the FHA lending criteria have been made more progressive to appeal to a larger segment of the market. The maximum loan value has been increased to $418,750. This, compared to the average home price of around $349,000 (RMLS stats.) is above average. The FHA, in decades past, had a loan ceiling that was below the average home sale price. So, they are reaching out to a larger segment of the market.
Pacific West Appraisal Services, Inc.
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