Quick thoughts about the Federal Housing Administration, also known at the FHA, or HUD – Housing and Urban Development.
“The FHA estimates it could insure as many as 60,000 additional condo loans each year under new rules.”
What does this mean?
Whenever the government is the backstop for a particular property group, it means that the quality of the borrower usually goes down.
Being able to buy a home with 5% down, or even less, means less skin in the game.
And that usually means that a buyer has less incentive to stick with a property when the going gets tough.
Of course, these aren’t condo deals that are happening in New York City, but I watch for any signs that remind me of the less-than-ideal lending standards that were in place back in 2004-2008.
If you add in lower mortgage rates to new incentives to get less-qualified buyers to purchase, it can lead to more sales volume…but may not bode well for future bankruptcies.
You can read more here.
From a couple of weeks ago. -Scott