Why FHA Loans Are Popular Again...

Welcome to the Inside Track – My name is Brian Yampolsky, co-owner of Orion Mortgage Corporation. We talk about and share helpful information about the mortgage industry in the Phoenix Metro Area.

Today’s topic is Why are FHA loans are so popular in today’s market.

FHA loans were very prevalent in the 1990’s and early 2000’s. However, around 2003 there were 2 main shifts in the industry that reduced the amount of new FHA loans; 1) the Phoenix Metro Area saw property values increase to a point that exceeded the maximum FHA loan limit, and 2) conventional loan programs were created through FNMA and FHLMC that offered some of the same features that were previously only available
through FHA loans, such as more flexible credit underwriting and low/zero down payment.

During 2007 and 2008, many lenders have exited the industry and many of those flexible loan programs have also gone away. The local AZ market has been deemed a “declining market” and as such, most lenders have reduced their maximum loan amounts by 5%. There have also been rate adjustments added to those FNMA & FHLMC programs, meaning - if your credit score or down payment is lower, you’ll pay a higher rate. With the tighter restrictions and higher rates on FNMA loans, it was only a matter of time until borrowers began to look again at FHA loans. They are gaining popularity with today’s client who might not have much equity, down payment and a credit report that might be less than perfect. In fact, it is also one of the few remaining Zero Down loan programs available to home buyers.

If you have any questions about today’s topic, just send us an email to: Briany@orionmtg.com or call 602-912-0222 and we’ll be glad to advise you with the right information to help you make the right decisions.

Until next time!


Brian Yampolsky, Owner
Orion Mortgage Corp
602-912-0222