At this time last year we were seeing ominous headlines like FHA Bailout Inevitable, The FHA’s Bailout Warning, and FHA Bailout Program May Require a Bailout. Despite the dismal forecast, a year has made all the difference for the future of the Federal Housing Administration.
Fortunately for millions of first time homebuyers and taxpayers in general, the FHA defied the odds and roared back with a record year. The Agency published its Annual Independent Financial Report and Economic Outlook for Fiscal Year 2010 in November. Its fiscal year ended on September 30th. During the preceding 12 months the FHA insured a record 1.1 million loans. This is the highest mark in its 76 year history!
There are three significant ways that this will impact the real estate industry and potential homebuyers:
- Continued availability of loans for which borrowers (especially first timers) more easily qualify.
- Assumable loans. FHA Loans are “assumable”. When interest rates increase, sellers who have low interest rate FHA mortgages could have a huge selling advantage.
- Down payments as low as 3.5% increase affordability.
- Rehab loans maximize updates and makeovers.
How do buyers rate FHA buyer perks? Who uses them most, first timers or experienced purchasers?