Perhaps. They’ve already boosted required down payment to 3.5% in the last year, but remain one of the easiest sources of home loan money. An article in yesterday’s WSJ said that current delinquencies on FHA loans were up from last year by about 1/2 to 7.8%.
FHA is required by Congress to maintain cash reserves of at least 2% of the loans it insures. Reserves were 6.4% in 2007, 3% last year, and is expected to be less than the required 2% when those numbers will be published this September 30.
So, what will happen? Maybe increased down payment. Maybe increased oversight and regulation at FHA and FHA loan originators. Maybe another bail out. But, probably not anything that will help people get loans.
Below is a house I recently sold that went FHA. Payments were a bit over 1K per month for this cool home. As I’ve said before, now is a great time to buy a house.