FHA loans growing in popularity, HUD secretary says

As banks have tightened their lending standards, Federal Housing Administration loans have become an increasingly popular financing option, U.S. Housing and Urban Development Secretary Steve Preston told CNBC today. Last week, HUD announced new permanent FHA mortgage loan limits, which insure single-family home mortgages up to $271,050 in low cost areas and up to a maximum of $625,500 in high cost areas. “What we’ve seen at FHA is our share of the market go from 2 or 3 percent a couple of years ago up to over 20 percent recently,” Preston said. He noted that home buyers with decent credit can still obtain a loan, and for those struggling to pay off their loans, they are finding ways to “honor [their] commitments.”