As almost every Realtor, I have done many transactions in which the loan was guaranteed by the FHA. Most of the transactions went smooth, sometimes a touch slower that I would have like, but in every case the transaction was completed. All was well until the calendar flipped onto 2014.
Brief History Lesson
The Federal Housing Authority or FHA was founded, by congress, in 1934 when the American housing industry was flat on its back bad. In 1965 it was made a part of the Housing and Urban Development Dept. or HUD. Since that time it has insured loans for than 34 million properties, making it the largest loan insurance company in the world. I'd call that a very successful organization. Until now.
I do most of my business in Tracy Ca. in San Joaquin county. In 2013, FHA set loan limits for our county at $417,000. That worked for the large majority of our buyers and sellers. Our market did great. When the calendar flipped to 2014, the loan limit rolled back to $304,750. Really? Yes really.
Today's Numbers
A quick look at the numbers in Tracy will explain my issues with the FHA. Looking at conventional sales and short sales we have 191 available properties. The median price of those 191 properties is $399.950. So much for FHA. Of the available properties today 30 are with the FHA price guide lines.
Today our market has movement but it has slowed substantially. If we could revert to 2013 numbers our market would be jumping. Unfortunately the FHA decision makes little practical sense, and has virtually no chance of being changed this year.
My name is Dale E. Bledsoe with Crown Key Realty and as always I may be reached at 209-481-6031.
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