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Apr 29

FHA Changes Have little Impact

The recent changes to FHA’s mortgage insurance premiums have had little impact locally.  The largest change, an increase to the Up Front MI, nearly double the previous factor, has not slowed the number of FHA applications.  In fact, the number seems to be on the upswing. 

I do not have access to all of the stats in our market but my government applications have picked up the pace considerably.  As a percentage in the first quarter FHA slipped a little in my pipeline but only because of a spike in conventional applications.  The number of both types of loans saw a huge increase. 

Earlier this week a Realtor told me they will not allow their clients to use an FHA mortgage to finance a purchase.  My first thought was, “Good luck with that.” 

That’s half of my pipeline! 

My second thought was something I learned 30 plus years ago from Warren G. Harding, author of the book, “Trade Secrets of Exchanging.”  Warren asked me, “What is the value of a life preserver?  If you are drowning in the middle of the ocean it is worth a lot more than it was in the store.”

FHA is still one of the most affordable options available to homebuyers.    

 

     

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