The quality of FHA lending in Pennsylvania, New Jersey, and Delaware

Anonymous

No 11-02, Community Affairs Discussion Paper from Federal Reserve Bank of Philadelphia

Abstract: The Federal Housing Administration (FHA), an agency within the Department of Housing and Urban Development (HUD), insures mortgage loans made by private lenders. All FHA-insured borrowers pay mortgage insurance as one of the terms of their mortgage loan, and this insurance protects the lender against losses if the borrower defaults. In addition to providing a mortgage guarantee, the FHA single-family loan program has features such as a low down payment and a low minimum credit score that benefit borrowers who may not be able to obtain financing in the conventional market. Because of the FHA?s guarantee, lenders are willing to extend credit to borrowers who might otherwise be excluded from the mortgage market. In recent decades, the FHA single-family home loan program has disproportionately served first-time homebuyers as well as low- and moderate-income (LMI) and minority households.

Keywords: Mortgage loans; Housing policy (search for similar items in EconPapers)
Date: 2011
Note: Authored by Community Development Studies and Education Department.
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