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Buyers Are Flocking to FHA (government backed) Loans!
Posted on Aug 20, 2008 by Mike Geyer
Borrowers are flocking to government insured loans, particularly those offered by the Federal Housing Administration, according to Inman News. The Mortgage Bankers Association says application for government-insured loans was up 133.9% in July from a year ago; while applications for conventional loans like those purchased and guaranteed by Fannie Mae and Freddie Mac fell 50.2%. Ginnie Mae, which securitizes FHA loans is surpassing Fannie & Freddie in the issuance of securities backed by fixed-rate mortgages during August. Ginnie Mae is the model for a proper mortgage agency. Ginnie owns no loans and does not borrow. It lost a little money in the 80s which was the only time and was the result of an FHA experiment. Ginnie Mae is the ever-watchful, never wasteful guardian of the budget.
In addition, Congress and the Bush administration have expanded FHA loan guarantee programs by raising loan limits and creating new products that allow borrowers who are behind on their existing mortgage refinance into more affordable loans. The FHA Loan limit for Clarke and Oconee Counties is now over $298,000.
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