ICBA Mortgage — an Independent Community Bankers of America mortgage subsidiary that provides secondary marketing services to members — reported yesterday that 22% of this month’s loans were insured by the Federal Housing Administration (FHA), up from last year’s 9%. 


For borrowers seeking to finance their house purchase or refinance an existing mortgage, the FHA’s programs appear a practical option, given that there’s “less flexibility in the current non-governmental mortgage sector combined with new loan standards and modernized processing options” that are making the FHA “more attractive to community bank mortgage lenders and their borrowers alike”, according to ICBA Chairman Cynthia Blankenship.


The increasing number of community banks offering FHA mortgages as part of their mortgage product portfolio may reflect the benefits and flexibility FHA financing offers customers. 


Among these benefits are: current and temporary FHA loan limits ranging from $271,050 to $729,750, lower down payment requirements, more flexible total debt and housing debt to income ratios, no reserve requirements for single unit properties, lower monthly mortgage insurance premiums compared with the conventional conforming market, acceptance of limited or non-traditional credit history, no minimum or credit score needed, third parties can pay for closing costing, prepaids and escrow, down payment assistance and secondary financing allowed, non-occupant, and co-borrowers permitted.


The unit reported a 25% increase in its total number of mortgages during the first five months of this year, compared to the first five months of 2007.

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