LogFAQs > #973068612

Questionmarktarius posted...

So it's been meaningless feel-goodism this whole time, huh?

That wasnt my take from it. FHA loans are generally meant for marginal first time owners. But you cant be over qualified for them.

Some borrowers use them strategically for reasons that are legal but not really the intent of the loan. E.g. buying places 3.5% down, doing the minimum residency requirements, and then selling or renting out, only to do it again, rather than moving onto conventional loans like most 2nd time owners would.

These borrowers also represent a unique risk profile the more typical borrower doesnt, mostly because they are viewing it as an investment rather than a long term home.

This move will push more well qualified borrowers into conventional loans. The flippers / investors will continue to use these loans, and pay slightly more.

And some high credit score low wealth borrowers will also pay more. But they will refinance into conventional 3-5 years into owning the place, so impact to them is still marginal, IMO.