Recent Moves By The FHA, Tougher and Better?
The increase in defaults by homeowners with FHA loans has drawn the attention and ire of governmental authorities. Results of a recent audit have brought the “cash reserve issue” to the forefront; couple this with trying to encourage the housing market with relaxed guidelines implemented in late 2007, the issue of what to do is again “front and present.”
Results are a tightening of borrowers qualifying requirements, which has made the process of securing a loan on a home tougher for 20% of 2009 purchasers nationally. This change in thinking within the FHA will aid them by accumulating “a higher level of clientele” for their insured loans, hoping for a lessened default rate.
Reviewing data of homes sold in Fauquier County, we find that purchasers in 2008 - 2009 utilized some type of FHA loan program on approximately 40% of completed home transfers. Now blend in the buyer tax credit programs enacted in late October with this new ideology within the FHA and the net result in our area will be negative. You can’t get the credit if you can’t get the loan.
Wrong program, wrong time, bad results are eminent.
Don Khoury