Construction Las Vegas - Greenspun Media Group
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ASSOCIATION PROFILES Most people don't think about the Federal Housing Administration as o en as Realtors do, but when you ask someone over 30 how they bought their rst home, most will smile and say, "I got an FHA loan." Since FHA is just a happy memory for many, it's understandable the agency's new fee reduction was only modestly celebrated when it went into e ect this year. I can tell you though, for hundreds of thousands of aspiring U.S. homeowners who have been priced out of the housing market, the policy shi is a life- changing opportunity. There is a vocal misguided minority who will argue this price reduction will turn back the clock to the days when underquali ed buyers received loans they could never repay. is couldn't be further from the truth. FHA is not lowering its underwriting standards or luring irresponsible borrowers into home- ownership, instead it is enabling quali ed buyers to safely enter the market without exposing taxpayers to unnecessary risks. e new policy lowers the cost of FHA's mortgage insurance premi- ums by 50 basis points, which trans- lates into an average savings of $900 a year for future homeowners and current borrowers who re nance. When private investors retreated from the mortgage sector in the wake of the worst housing crisis since the Great Depression, FHA in- creased its insurance activity to keep money flowing into the market. Without the FHA, our ongoing eco- nomic recovery in Southern Nevada would be taking even longer. FHA began raising its mortgage insurance premiums in 2011 to counter the expected losses that would come from the increased activity. By 2014, the fees were up by 145 percent, an amount overpriced by four times the anticipated risk to FHA's funds. It was clear the pendulum had swung too far by 2013, when nearly 400,000 credit- worthy borrowers were priced out of the housing market because of high FHA premiums. Economists at the National As- sociation of Realtors estimate that by lowering the annual premiums by 50 basis points, from 1.35 percent to .85 percent, FHA will price-in an additional 1.6 million to 2.1 mil- lion U.S. renters, along with many trade-up buyers. is could result in 90,000 to 140,000 additional annual U.S. home purchases. More a ordable FHA loans will also have a positive impact on our all-important and still-too-scarce rst-time buyers, who have been entering the market at a lower rate than normal in recent years . FHA's fee reduction is nancially sound, socially responsible and good public policy. e lower prices will enable more quali ed borrowers to enter the market, and a new genera- tion of homeowners to say, "I bought my rst house with an FHA loan." GREATER LAS VEGAS ASSOCIATION OF REALTORS lasvegasrealtor.com 1750 E. Sahara Ave. Las Vegas, NV 89104 702-784-5000 — Keith Lynam, 2015 president of the GLVAR. Lyman has been a local Realtor for 11 years. CONSTRUCTION LAS VEGAS 68