FHA Loans Becoming Popular Again In Tallahassee

Do you ever wonder how much lending practices really affected the Tallahassee housing market? We read so many stories about "predatory lending" and abused government loan programs, that I got a little curious and decided to check out the history of mortgage loans in Tallahassee.

I decided to limit my sales information to "arms length home sales" only, for two basic reasons. First, it would reduce the amount of sales that I would have to screen, and second, it would represent a truer picture of the normal real estate lending practices in Tallahassee.

Different Home Loan Types In Tallahassee

Over the past twenty years, there have been five main sources of funds for home buyers in Tallahassee. Home buyers have completed their purchases with conventional financing, FHA financing, Cash, VA Loan financing, and individual financing. I was a bit surprised to see that FHA has only financed 16% of the closed home purchases since 1991.

Home Loan Picture By Financing Type

FHA Loans Becoming More Popular In Tallahassee

The popularity and usage of FHA loans is growing in Tallahassee. When we look at a graph of Combined Loan To Values in closed arms-length home sales in Tallahassee, the reason begins to become mighty clear.

Best Loan To Value Graph For Mortgage Loans

This real estate graph shows that the most popular loan (Conventional) has seen the average combined loan to value drop from nearly 88% two years ago, to below 80% today. That 8% difference represents an additional out of pocket cash requirement for home buyers of $13K on the median home in Tallahassee.

FHA Loans Versus Conventional Loans

When we compare the conventional loan product to the FHA loan product, we see that the out of pocket cash requirement seems to be driving the train. As an example, if you wanted to finance a $165K home purchase in Tallahassee, you would need a down payment of $3,500 using FHA financing, but you would need nearly 10 times that much ($33,150) to use a conventional loan product, based upon the averages reported this year.

Mortgage Rate Graph in Tallahassee

What this graph shows is that the Combined Loan To Value (C-LTV) of each loan program has dropped recently, but conventional loans have dropped below 80% on average, while FHA loans have dropped to just below 98%.

The vertical bars in the graph show how usage of conventional loans has plummeted since 2007, while during the same time frame FHA loans have been on a sharp rise. This means that FHA loans are more popular than ever, while conventional loans have dropped to the same level as 1991.

It appears as if the conventional loan market has moved to a safer level, while the government loan market (FHA) has stayed at a level which offers Tallahassee home buyers a "low money down" opportunity when buying a home. Time will tell if the government loan programs will tighten up even more, following the lead of the conventional market.

HousingReporter On Twitter Is The Top Twitter Real Estate Broker Please click here to tweet this to your friends!

subscribe-to-the-exclusive-tallahassee-real-estate-newsletter

As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible. Additionally, if you would like to respond (leave a comment) to this article, you will need to “click through” to the blog site to post your feedback.

Keep checking out the Tallahassee Real Estate Blog every day for updates on real estate in Tallahassee Florida.

Subscribe in a reader Subscribe by email

Joe Manausa is a real estate blogger, a real estate investor and the Broker and Co-Owner of Joe Manausa Real Estate. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.

Home Sales Advice 10 Critical Home Selling Steps

Provide feedback with a real estate survey

Creative Financing Options For Home Buyers Buy A Short Sale

Please Do Us A Small Favor

We work very hard to produce daily content for our long-time readers and first-time visitors. We provide this information for free, hoping to earn your respect and trust and the right to one-day help you when selling or buying a home. Can we get your help spreading the word about our blog?

If you like the content, would you please like it or share it using the Facebook button at the beginning of the post? This simple action will be greatly appreciated! THANK YOU!

Please Like Us And Share On Facebook - Help us grow our brand!

Also like us on Facebook at https://www.facebook.com/joemanausarealestate/

Your Local Expert In Tallahassee

When moving to, in, or from Tallahassee, you will fare better if you work with a local expert. We are here to help. If you have further questions on the Tallahassee real estate market, you can leave a comment below, give us a call at (850) 366-8917, or drop us a note and we'll give you the local information needed to ensure a successful, smooth transaction.

As a local born and raised in Tallahassee with a focus on customer service, I promise you'll find great success when working with Joe Manausa Real Estate, just as have our past customers. You can read thousands of their reviews reported on Google, Facebook and Zillow right here: Real Estate Agent Reviews Tallahassee.

The digital marketing guide for small businessesHave you heard about my new book "The Business of Getting Business?" It's a comprehensive guide for small businesses to help them make the move to digital. For those of us who want to survive and thrive in a world where large corporations are taking over, it is a must-read. It's also the perfect guide for how to sell a home in the digital age. You can find The Business Of Getting Business by clicking on any of the trusted retailers below.

Real Estate Agent reveals in Tallahassee, Florida

Think all REALTORS are alike?

Read what people are saying about working with Joe Manausa Real Estate! You can see thousands of real customer reviews reported on Google, Facebook and Zillow at this link: CLICK HERE FOR REAL ESTATE AGENT REVIEWS.

Post a Comment

(850) 378-5727