FHA loans, which have been the savior of many mid-range condo projects, are about to get a little more tightly underwritten.
According to an article in Saturday's Wall Street Journal,FHA mortgages which have relatively less stringent credit score requirements and only require 3.5%, have now taken the largest share of the mortgage market. But the FHA has now dropped below its minimum loan reserve
According to the Journal, the FHA said, " tighter credit standards would suffice... the FHA wouldn't need to raise the premiums borrowers pay or seek an increase in its minimum down-payment requirement of 3.5%."
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The bulking up of FHA insured mortgages has caused many commentators, myself included, to wonder just how many 97% loan-to value loans can be made, and just how easy it will be for buyers (who run into financial trouble) to walk away when they only have a few thousand dollars at stake.
According to an article in Saturday's Wall Street Journal,FHA mortgages which have relatively less stringent credit score requirements and only require 3.5%, have now taken the largest share of the mortgage market. But the FHA has now dropped below its minimum loan reserve
According to the Journal, the FHA said, " tighter credit standards would suffice... the FHA wouldn't need to raise the premiums borrowers pay or seek an increase in its minimum down-payment requirement of 3.5%."
----------
The bulking up of FHA insured mortgages has caused many commentators, myself included, to wonder just how many 97% loan-to value loans can be made, and just how easy it will be for buyers (who run into financial trouble) to walk away when they only have a few thousand dollars at stake.
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