FHA home financing has played a crucial role in helping Americans become homeowners and they have been offering mortgage products since the Great Depression. Today, FHA home loan programs support almost 35% of the home financing market. FHA is the home financing arm of the Housing and Urban Development Department. It oversees Fannie, Freddie, FHLB and other mortgage lenders and provides mortgage insurance on loans made by the FHA lenders for lower-income and first-time buyers.
Is FHA Home Financing Getting Better?
FHA now insures about 5.4 million 1-family mortgage loans at a combined value of $675 billion, making it the world’s largest insurer of mortgage loans. HUD continues to offer FHA refinance and purchase loans in all 50 states.
Together with Fannie and Freddie, the FHA backs 90% of new American home loans. FHA mortgage programs have received a lot of criticism recently, because of the depleted FHA loan reserves and increased foreclosures but the agency was the only financing company that stepped up to fill the void when the subprime mortgage market crashed in 2006. FHA again stepped up in 2008 when conventional mortgage lenders and private insurers were squeezed by the credit crunch. FHA lenders remained focuse on improving the housing markets by providing better FHA home loans in 2011.
