The bulk of the loans are being issued by FHA (The federal Housing Administration). These are not actually loans which are being made, rather insurances which are given to lenders against possible losses. Additional government loans are being given by the U.S. Department of Veteran Affairs.
In the month of May, 2009, the share of government-issued mortgages was down just a bit from June of 2008: 27% vs. 26%. In 2005, the portion of government-issued loans was under six percent. During that period, the glut of no money down loans placed the FHA in a useless position in the loan market, as their loans have required a down payment of at least 3.5%. In today's market, that type of down payment requirement is almost impossible to find in the private sector. Throughout the past two years, FHA's share of the loan market has increased sharply.
FHA's increase in market share throughout these summer months is largely due to fewer people looking to refinance or obtain a loan from other lending institutions as interest rates continue to increase.
Many buyers out there continue to believe that the purchase of a home should not require a sizable down payment. A recent survey reports that over 1/3 of potential buyers plan on putting down ten percent or less on their home purchase. Only twenty-two percent plan on making a down payment that is greater than twenty percent.
|
