Hello, LOs!
All week we've talked about the challenges and discrimination VA homebuyers face in today's housing market. Today I'd like to open the floor for LOs to share their experiences and thoughts about buyers trying to land a dream home with an FHA-insured mortgage.
One capital markets-focused mortgage executive said that many of the same problems afflicting VA borrowers are prevalent for FHA borrowers.
"Thank you for writing this article and pointing out the challenges for our vets in using their VA mortgages to buy a home. I can tell you that this same thing is occurring in the FHA insured mortgage market for consumers. It is unfortunate and flat out ridiculous that our administration at HUD/FHA refuse to address these issues that are directly adversely affecting persons of color, first-time homebuyers, and those needing to use an FHA loan for their home purchase."
He added that the appraisal rules are "draconian in comparison to conventional loans" and real estate agents "advise their sellers to avoid these offers when stacked up" against conventional loan buyers.
"And forget about the all-cash and investor buyers out there competing for the initial purchase only to then rent out at high payment rates, further negatively impacting these families trying to secure a home for their family," he said.
In his view, the FHA is too slow to adjust the FHA loan limits in areas with accelerating home prices.
"I realize we have been in the midst of unprecedented times and the prolonged low interest rates, coupled with low supply, obviously further impact the fact that those who could most benefit from homeownership are virtually prevented" from getting a home under contract using an FHA or VA loan."
Lots to unpack there, obviously. So lemme ask you, LOs – what has your experience been with FHA buyers? Are they having trouble competing for new homes? Do agents and sellers discriminate against them? Should HUD/FHA make changes to allow those borrowers to better compete?
Email me anonymously at jkleimann@housingwire.com.
That's it from me! Have a great day!
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