Is FHA Going Into The Subprime Mortgage Lending Business?

The answer is a definite maybe. According to recent articles by syndicated columnist Kenneth Harney, the Federal Housing Administration (FHA) "is actually expanding its business nationwide for credit-impaired and first-time home purchasers" and "which recently has seen a doubling of customers refinancing out of private, subprime loans into its insured mortgage programs."

FHA loans do not offer all of the features that the subprime mortgage industry has become known (some would say notorious) for. For example, the maximum loan under FHA is currently just under $363,000 in high cost areas, but reportedly, Federal legislation is expected to be introduced this year that will propose to have the FHA loan limits match the limits of Fannie Mae (FNMA) and Freddie Mac (FHLMC) - currently $417,000. To read more, see

• It's Time to Take Another Look at FHA Loans (The Ledger (Lakeland, Florida, at theledger.com) and
• FHA May Have Loans for Many Home Buyers Frozen out of Subprime (Realty Times)

Click here to watch a March 15, 2007 U.S. Senate subcommittee hearing on FHA solvency and reform proposals, and commentary on the subprime mortgage lending problems (Courtesy of C-Span)
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