Monday, October 20, 2008
FHA Redux, Bigger & Better
The U.S. housing agency created in the depths of the Great Depression is once again doing a brisk business helping stabilize the mortgage finance market.
Demand for loans insured by the Federal Housing Administration is soaring, after years of being overshadowed by subprime, interest-only, no-doc and other inventive mortgage types.
Through July, the number of FHA loans in New Jersey already is 80 percent higher than in all of 2006, according to the Philadelphia office of the FHA.
This spring, the FHA increased its loan limits to provide relief to struggling homeowners and the tight housing credit markets. In southern New Jersey, the FHA loan limit is about $450,000, while upstate, where prices are higher, the limit is above $750,000.
Most of the new interest is coming from distressed homeowners seeking to refinance their existing, mainly non-FHA loans - especially adjustable loans resetting at higher rates. Of 22,666 FHA loans in New Jersey through July, 13,597 were for refinancings by existing homeowners.