More Buyers In Area Are Choosing Fha Loans

August 16, 2009|By Jamie Smith Hopkins | Jamie Smith Hopkins,

Near the peak of the housing frenzy four years ago, 75 percent of homes sold in the Baltimore metro area went to buyers with conventional mortgages - loans not insured by government agencies.

Now such deals are much fewer and farther between.

Thirty-five percent of Baltimore-area buyers got conventional loans last month, according to Metropolitan Regional Information Systems. The share of buyers turning to Uncle Sam - particularly for Federal Housing Administration-insured mortgages - is way up in these post-bubble, post-subprime times.

Forty percent of Baltimore-area buyers went FHA in July, according to MRIS. (That's up from 2 percent in July 2005. Yeah: 2 percent.) It's such a turnaround that the number of FHA-financed purchases jumped ninefold from four years ago, even though total home sales fell by almost half.

VA loans are also up. So are assumptions - where the buyer takes over the loan held by the seller - and owner financing. (Owner financing deals only rose from one to four, so I wouldn't call that a trend.)

But not all buyers got loans. Even in these recessionary times, some people do have the means to buy a house with 100 percent down. All-cash buyers picked up 12 percent of the homes sold last month, up from 7 percent in July '05.

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