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More homebuyers seek government-backed loans as an affordability lifeline

Housing Wire

As a result, more buyers are turning to products like Federal Housing Administration (FHA) loans, which accounted for 24% of primary home purchases in 2024, and U.S. Department of Veterans Affairs (VA) loans, which made up 10%, according to purchase loan lock data from Optimal Blue.

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Cause for concern? FHA, VA delinquencies are rising quickly

Housing Wire

Specifically, conventional loans are performing much better than Federal Housing Administration and U.S. Department of Veterans Affairs loans. The seriously delinquent rate (loans that are at least 90 days overdue, plus those in foreclosure) for FHA loans is 4.12%, roughly three times higher than the 1.14% rate for conventional loans.

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Southern states had the highest mortgage denial rates in 2023: NAR

Housing Wire

These include insufficient credit or income, changes in credit scores and high debt-to-income ratios. “A loan-to-value ratio that is too high, either because of a limited down payment or an appraisal of the home that resets the value used to calculate this ratio, can also be a factor,” she said.

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Refi activity surged in March, and non-agency loans are picking up steam

Housing Wire

FHA loans saw an 8-basis point drop to 6.27%, while VA and jumbo loan rates nudged up slightly to 6.13% and 6.73%, respectively. Debt ratios improve : The average debt-to-income ratio declined from 37.3% Interest rates hold steady : The OBMMI 30-year conforming fixed rate held flat at 6.6%

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Mortgage quality control report reveals sharp rise in insurance defects

Housing Wire

Loan applicants also struggled as rising premiums made it difficult for them to qualify for mortgages due to higher debt-to-income ratios. Conventional loans had the highest defect percentage in Q3 2024, accounting for 51.61% of critical defects.

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Consumer advocate says policy changes are needed to help FHA buyers compete

Housing Wire

The Consumer Federation of America (CFA) is calling for policy changes that would help alleviate the difficulties for homebuyers using Federal Housing Administration (FHA) loans when competing in tight markets. of the U.S. mortgage market in 2023, up from 14.3% in 2022, according to HUD.

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Should I pay off student loans before buying my first home?

Housing Wire

Gone are the days when you had to put 20% down to get approved for a loan to purchase a home. For example, a conventional loan lets you put as little as 3% down. An FHA loan requires as little as 3.5% With these rates, it’s a bit easier to save a down payment , while still paying down debt.