Here’s a great article from the Washington Post highlighting why FHA is once again becoming a major player in the mortgage market.
For the past few months, nearly every loan that Laura Triplett has closed for customers at SunTrust Mortgage has been backed by the Federal Housing Administration.
“I’ve got another 20 people closing in June and most of them got FHA loans, too,” said Triplett, a branch manager at the bank’s Woodbridge office. “I don’t know what we’d be doing without FHA.”
Demand for these once-neglected mortgages has surged because they do not require the hefty down payments or stellar credit scores that lenders have come to expect from borrowers. In addition, the amount of money people can borrow on these loans went up dramatically this year, and many homeowners have found them attractive for refinancing.
They might not be the cheapest loans around, but they are the best fit for some borrowers — and the only option for others — as lenders continue to toughen their standards in response to the subprime meltdown.