Connect with us

Hi, what are you looking for?

The American Genius Real EstateThe American Genius Real Estate

National Association of Realtors

The National Association of Realtors backs FHA’s move to expand credit to wider range of potential borrowers

When the FHA announced a loosening of lending conditions yesterday, the National Association of Realtors issued a supportive letter to the Administration.

minimum wage mortgage fha

Roughly a year after its proposal, the Federal Housing Administration announced yesterday a loosening of lending conditions, allowing “millions” of potential buyers into the market that are currently restricted.

Under the new measurement, the FHA intends to take a deeper dive in evaluating loans that eventually default, which could lead to lenders being stripped of their FHA approval. This measure impacts borrowers with credit scores between 580 and 680.

The metric measures the defaults of borrowers in what the FHA calls “three distinct credit bands,” using an adjusted default rate instead of a weighted average. The lender’s percentage of loans in each band are measured against a benchmark rate for seriously delinquent loans in each band.

Previously, an FHA-approved lender could be cut from the program if their default rate went above a certain threshold, but the new measurement loosens that metric. This segment of lenders has long shied away from this segment of the market to avoid risking their FHA approval, but Uncle Sam intends to change that.

NAR expresses their support

Reactions were mixed, and today the National Association of Realtors (NAR) 2015 President, Chris Polychron sent the following letter of support for the measure to Edward Golding, Principal Deputy Assistant Secretary for Housing at the US Department of Housing and Urban Development:

The takeaway

With this context, will this warm critics’ hearts to the move to loosen what most consider to be overly restrictive lending conditions? Affordability remains the top challenge, keeping many out of the market, but could letting people with a few blemishes on their record but the money to qualify really be such a bad thing?

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

Advertisement

The Daily Intel
in your inbox

Subscribe and get news and EXCLUSIVE content to your email inbox.

Advertisement

KEEP READING!

National Association of Realtors

Realtor safety is of upmost importance to those in the field, especially to those at NAR. Here's how they're helping to save lives.

Real Estate Associations

EXCLUSIVE: Why is NAR leaving Las Vegas for next year's massive conference, and where will it now be?

Real Estate Brokerage

As rules surrounding workers' independent contractor status are aimed at gig workers at Uber and elsewhere, how could this impact the practice of real...

Op/Ed

NAR's Code of Ethics emphasizes that "Under All is the Land," and being good stewards of this land is now critical.

The American Genius' real estate section is honest, up to the minute real estate industry news crafted for industry practitioners - we cut through the pay-to-play news fluff to bring you what's happening behind closed doors, what's meaningful to your practice, and what to expect in the future. We're your competitive advantage. The American Genius, LLC Copyright © 2005-2022