16.3 Billion dollars – with a B. That is the projected short fall in which the Federal Housing Administration might incur and may need to be “Bailed out”.
FHA is the most prevalent loan on the planet at this time. Sporting ultra low down payments at 3.5%. The credit only has to be so/so and they have started to relax some of their other “stringent” guidelines.
The FHA loan, while at 3.5% down, has PMI, Property Mortgage Insurance, attached to it. There is a formula with regard to how much that would be – but for most buyers between 150 and 500k – it is in the neighborhood of $110 and $400 a month. However, that is small potatoes when someone is able to come in with a lot less down than a conventional loan will allow.
FHA has a few interesting “regulations” – The Condo’s/Townhomes and some Planned Urban Development (puds – detached condo’s), have to be “FHA certified”. in the Santa Clarita Valley cities, a lot have lost that certification due to the distress in the real estate market.
If you are heading out to purchase a home and you want to use a FHA loan – Make sure your real estate professional is very versed in FHA and make sure they can give you the Hook Up when it comes to searching for the FHA approved properties.
If FHA needs to be bailed out, I’d imagine that nothing is going to change with regard to the loans that are in process. There may be some guideline changes with regard to the new FHA loan applicants, but only time will tell.
The Government bailed out the Auto Industry and they were still selling cars!!!- FYI
BE Safe – Happy Sunday and don’t forget to subscribe below the latest Real Estate map mentioning properties that are FHA approved: