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40% Of Twin Cities Home Purchasers Used FHA In 1st Half 2010

The trend from 2009 continues: nearly 40% of all home buyers in the Twin Cities during the 1st half of 2010 used FHA Loan to finance their purchase.  This is up from just 2% in 2007!

Why are so many buyers using FHA loans to purchase their home? Here are some reasons:

  • FHA requires only a 3.5% down payment
  • FHA 203k (rehab) loans can make it easier for buyers to fix up houses
  • FHA underwriting requirements are often now more lenient than Conventional mortgages (below)
  • FHA allows higher debt to income ratios and lower credit scores than many Conventional products
  • Mortgage insurance is often cheaper than conventional loans

Many consumers believe that FHA loans are only for first-time buyers – that is simply not true.  Repeat buyers can qualify too, so long as they are owner-occupants.

I would venture to guess that without FHA loans, 1/2 of those buyers would not have been able to purchase this year – that would have added up to a lot of lost sales!

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3 comments
Ashtin
Ashtin

I hear there's a trend to where people are being double-charged for their mortgage. Like Bank A transfers accounts to Bank B. BUT both banks end up charging the customer. What a mess. Why is this becoming a problem NOW?

Marge
Marge

It's great to know that if I borrow, I am not alone. Loans are just plum scary nowadays. But if the interest is low, I guess it's not bad.

Disclaimer

TwinCitiesRealEstateBlog.com is not a Multiple Listing Service MLS, nor does it offer MLS access.
This website is a service of Aaron Dickinson of Edina Realty, a broker Participant of the Regional Multiple Listing Service of Minnesota, Inc.