Need Understanding Of FHA/HUD
All the pre-foreclosure/short sale properties that we are currently working are FHA mortgages. Can someone enlighten me as to why we might have such a high % of FHA loans vs. conventional? Does it have to do with the housing market here (median home price is probably $80,000) or the income levels, or just the mortgage companies that tend to be used in this area? A Chicago investor that we know just came across his first FHA and all we have are FHA loans here in East Central Florida. Are there any explanations for this? The FHA loans sure do require alot more for short sales...how do we attract conventional preforeclosures? Any insight will be appreciated.
Typically FHA loans are for first time homeowners and/or borrowers who lack sufficient funds for the down payment required for conventional financing. This makes them a higher risk loan and when the economy turns downward they are typically are the first ones to become delinquent.