Government will back more condo loans amid cooling housing market

The FHA predicts it could insure as many as 60K additional condo loans annually

TRD NATIONAL /
Aug.August 14, 2019 05:26 PM
The Federal Housing Administration loosening rules around its condo loans

The Federal Housing Administration loosening rules around its condo loans

Amid a cooling housing market and growing concerns about a recession, the Trump administration is making it easier for first-time condo buyers to get a government-backed mortgage.

The Federal Housing Administration is backing more loans for those first-time buyers, according to the Wall Street Journal. FHA loans require significantly lower credit standards than conventional loans and only require a 3.5 percent down payment.

The FHA predicts it could insure as many as 60,000 additional condo loans annually. In 2018, the agency backed 16,000 condo loans, according to the Journal. The new rules only apply to moderate income borrowers.

Existing homeowners nationwide have been taking advantage of falling rates, with $565 billion worth of mortgage loans reported in the second quarter. The increased appetite has meant large banks like JPMorgan, Wells Fargo and Citigroup — and smaller lenders — reported an increase in mortgage originations.

Meanwhile, the FHA’s move comes at a time when single-family homes in markets like Seattle and Austin have become unaffordable to many new buyers. Condos are seen as a cheaper alternative, but getting financing can be more difficult. The median price of an existing condo or co-op unit was just over $260,000 in June, compared with nearly $290,000 for the median existing single-family home, according to the National Association of Realtors. [WSJ] — Keith Larsen


Related Articles

arrow_forward_ios
The Future is Flexible: Office Leasing and the Digital Workspace

The new digital office experience

The new digital office experience
New building technology could help stop California brownouts

New building technology could help stop California brownouts

New building technology could help stop California brownouts
Advances in GIS technology could help create richer, deeper narratives about real estate.

Advances in GIS technology could help create richer, deeper narratives about real estate

Advances in GIS technology could help create richer, deeper narratives about real estate
Hotels struggling under Covid-19 must pivot to alternate sources of revenue

Hotels struggling under Covid-19 must pivot to alternate sources of revenue

Hotels struggling under Covid-19 must pivot to alternate sources of revenue
Digital twins prove their benefit in wake of COVID-19

Digital twins prove their worth in wake of Covid-19

Digital twins prove their worth in wake of Covid-19
Face masks force a facial recognition reckoning

Face masks force a facial recognition reckoning

Face masks force a facial recognition reckoning
The growing trend of ESG Investing in commercial real estate

The growing trend of ESG Investing in commercial real estate

The growing trend of ESG Investing in commercial real estate
How new HVAC requirements will affect store reopenings and sustainability goals

How new HVAC requirements will affect store reopenings and sustainability goals

How new HVAC requirements will affect store reopenings and sustainability goals
arrow_forward_ios

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

Loading...