FHA Loans- The best option for Many buyers

A year to a year and a half ago if you had looked at my pending files you would have seen that a great majority of the loans I was doing were conventional loans and VA or Texas Veterans loans with little to nothing down.  Things have changed; both loan officers like me and real estate agents have had to become pros again at writing and closing FHA transactions.  Government insured loans such as FHA and VA loans are up 133.9% from a little over a year ago according to an article by Inman News last week.  Why?  As the mortgage industry started to tighten its lending requirements as a result of many lenders closing their doors and even more homeowners getting foreclosed on the down payment requirements for conventional loans increased as did the minimum credit score requirements.  The traditional idea of needing to have 20% down had been all but erased from the minds of not only industry professionals but most home buyers as well.  The difference between putting 3% down (as is minimally required with FHA loans) and putting 5% down (as required by Fannie Mae and Freddie Mac with conventional loans) became a huge sticking point for many home buyers.  It’s not necessarily a bad thing that down payment requirements have increased it’s just a change that we all have to get used to again.  Statistically the higher the down payment a buyer puts down the less likely they are to allow their home to go into foreclosure.  Even putting 3% down gives home buyers more of a sense of responsibility and dedication to ensuring that their monthly payments are paid and on time each month.  I believe that this shift will end up being a positive change when we look back in the next few years.