The demand for refinance FHA loans continues to rise, but borrowers who actually qualify for a FHA loan seems to decline as HUD tightened FHA guidelines. FHA lending continues to expand their scope with new FHA mortgages designed to stimulate first time homebuyers. FHA refinancing has become a priority for most FHA lenders. FHA rates remain low with lenders reporting 30-year fixed rates at 5% and the 5/1 ARM is available at 4%.
While it will be months before FHA’s increased annual fee or tougher credit score requirements take effect, the housing agency already is seeing a drop in activity in its most popular sector the home purchase market. According to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions, FHA’s share of home purchases fell to 31.5% in January.
