Private lenders offer 5% down payments to unseat FHA

TRD New York /
Nov.November 05, 2013 01:30 PM

Mortgage lenders are throwing cash-poor homebuyers a bone in the form of new loans that require down payments of only 5 percent.

TD Bank, Bank of America and Wells Fargo are among the institutions seizing a market opportunity in a lending realm once dominated by the Federal Housing Administration, CNN Money reported.

Following the housing bust, the agency picked up the slack in lending to borrowers who could not come up with 20 percent down payments — which became the standard. But the FHA is now pulling back, raising premiums for borrowers and requiring them to take out private mortgage insurance, as of this year. That has created a window for private lenders.

“As the FHA selectively reduced market share by increasing premiums, we introduced a substitute for FHA loans,” Malcom Hollensteiner, director of retail lending sales for TD Bank, told CNN Money.

And as home prices continue to rise, loans are also becoming less risky and more appealing to private lenders. [CNN Money]Julie Strickland


Related Articles

arrow_forward_ios
30-77 Vernon Boulevard in Queens and Cape Advisors CEO Craig Wood (left) and 720 West End Avenue in Manhattan with Brack Capital Real Estate CEO Ariel Podrojski (right) (Images via Cape Advisors; Google Maps; LinkedIn)

The biggest loans of the slowest month: August’s real estate lending

The biggest loans of the slowest month: August’s real estate lending
Clockwise from top: Savanna's Christopher Schlank with 1375 Broadway, a rendering of 40 10th Avenue and 109 East 79th Street with Victor Sigoura (Google Maps; Getty; rendering via 40tenthave)

These were the largest Manhattan real estate loans in July

These were the largest Manhattan real estate loans in July
The Palisades Center and Pyramid Management Group CEO Steve Congel (Google Maps)

Palisades Center Mall operator avoids financial calamity (for now)

Palisades Center Mall operator avoids financial calamity (for now)
Clipper Equity's David Bistricer with 77 Commercial Street and Shorewood's S. Lawrence Davis with 160-05 Archer Avenue (REIT, Google Maps)

June’s biggest outer-borough loans led by $386M for Greenpoint

June’s biggest outer-borough loans led by $386M for Greenpoint
220 East 42nd Street and SL Green CEO Marc Holliday (Google Maps)

These were the largest Manhattan real estate loans in June

These were the largest Manhattan real estate loans in June
Your friendly neighborhood retail store couldn’t be happier to welcome you back (iStock)

Small Talk: Welcome back shoppers! Everything is going to be fine!

Small Talk: Welcome back shoppers! Everything is going to be fine!
Caliber CEO Sanjiv Das (iStock)

Lone Star affiliate reaches $17M settlement with NY homeowners

Lone Star affiliate reaches $17M settlement with NY homeowners
Clockwise from top left: 42-10 27th St, Long Island City; Flatbush Gardens, Brooklyn; and 148-10 and 148-18 Guy R Brewer Boulevard, Queens (Google Maps)

May’s biggest outer-borough loans led by $329M Brooklyn package

May’s biggest outer-borough loans led by $329M Brooklyn package
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...