A new study from Ed Pinto of the American Enterprise Institute (AEI) is stirring up debate on whether Federal Housing Administration-backed loans are helping the working class, or in fact, creating more economic hardship for lower-income Americans. 

Pinto released a new study, saying he found more than 9,000 U.S. zip codes with a projected foreclosure rate of 10% or more on FHA-backed loans.

Pinto suggests the terms of the FHA loans offer a negative combination of low down payments, poor credit guidelines and high debt-to-income ratios that greatly impact lower-income households, keeping them stretched from payment to payment.

He explained, “The resultant foreclosures – along with destroyed credit and loss of the very equity families were working to build – dashes their dream of homeownership.”

The study gained attention in the New York Times, where the FHA pushed back against some of the assertions with a spokesman saying the data ignores the millions of Americans who have successfully gained mortgage financing access through the FHA.

Click here to read more.


Most Popular Articles

FHA loan limits increasing for almost all of U.S. in 2020

Thanks to increases in home prices in 2019, the Federal Housing Administration loan limit will increase for nearly all of the country in 2020.

Dec 05, 2019 By

Latest Articles

HousingWire is growing. Come join us

2019 has been a year of tremendous audience and product growth for HousingWire and we couldn’t be prouder. But we’re not ready to rest on our laurels. Far from it. In fact, 2020 promises to be an even bigger year for HousingWire.

Dec 06, 2019 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please