From the Press of Atlantic City:
The U.S. housing agency created in the depths of the Great Depression is once again doing a brisk business helping stabilize the mortgage finance market.
Demand for loans insured by the Federal Housing Administration is soaring, after years of being overshadowed by subprime, interest-only, no-doc and other inventive mortgage types.
Through July, the number of FHA loans in New Jersey already is 80 percent higher than in all of 2006, according to the Philadelphia office of the FHA.
Drew Fishman, president of the New Jersey Association of Realtors and a broker with Re/Max Atlantic in Northfield, said Monday that FHA-insured loans years ago covered a big portion of home sales, but their popularity fell off as rising property prices exceeded the FHA loan limits.
Then in the spring of this year, the FHA increased its loan limits to provide relief to struggling homeowners and the tight housing credit markets.
“It was very good to have the increases in loan limits,” Fishman said. “It allows more people to get into the market, and more refinancing to reduce rates.”
He said that in southern New Jersey, the FHA loan limit is about $450,000, while upstate, where prices are higher, the limit is above $750,000.
Most of the new interest is coming from distressed homeowners seeking to refinance their existing, mainly non-FHA loans – especially adjustable loans resetting at higher rates.
Of 22,666 FHA loans in New Jersey through July, 13,597 were for refinancings by existing homeowners.