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Apr 29, 2014 5:22AM
Since 2008, I have been of the belief that our housing policy of "saving FHA" at any cost is the primary reason our real estate market has been unable to recover.  The first-time buyer is the keystone of the real estate market and that market cannot possibly recover without vibrant first-time buyer participation.  According to NAHB, in a "normal" market 40% of sales are to first-time buyers.  Thanks to our housing policy, which makes it much harder to buy a first home, that share has slipped to 30%.  That means that 25%, one out of four, of the first-time buyers who would normally be participants in the market have disappeared.  What market that you know of could recover after losing that many participants?  Want to know real reason the market is stalling again?  Just take a look at some of what has been done since 2008 to the first-time buyer who relies heavily on FHA financing:  (1) Seller-funded down payment assistance eliminated (2) Down payment increased (3) Seller-paid closing costs cut by 50% (4) Up-front and recurring MIP increased (5) Recurring MIP payable for the life of the loan (6) Condominium (a favorite first-time home) approval in chaos.  Add to this list of detriments the fact that while interest rates are considered very low, they have in fact increased by almost 25% over the past year and P & I represents the largest portion of the mortgage payment.  If you really want to fix the real estate market, simply undo the insane policies that have broken it in order "to insure FHA is available to future generations".  The most important thing to know about FHA today is, if you can buy without it, do so because it is a winner that has been turned into loser by people in Washington who know little more about real estate than any homeowner.
Apr 13, 2014 9:44PM

Forgot to add that you must pay PMI for the life of the loan with FHA.


Uhhmmm, no thanks

Apr 13, 2014 6:34PM
While FHA "can" qualify at 580 most lenders holding FHA loans will not. Also if you do find one that works with a 580 for the last 12 months you cannot have recent collections, must prove you made on time rental payments and no recent lates. Good luck having a 580 with none of these issues on your credit. This is highly misleading. I suggest to fix your credit the right way and have at least a 640 to reduce questions.  Also don't get fooled here, while the lender and seller can pay for all "closing costs" it is still the borrowers responsibility to bring 3.5% of their own funds or gift from relatives for the "down payment". Once again misleading.... this article tries to mask the fact people still need to prepare before they buy. Save and fix your credit before buying,  please! you will thank me later....   
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