FHA and USDA Buyers are NOT 2nd class citizens! Or are they?

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FHA Buyers, at least in my market, are normally placing the minimum amount down, 3.5%, and asking the Seller to pay 6% towards their closing costs. In a market where 87% of the sales are distressed properties, FHA Buyers, in the eyes of the Seller, are second class citizens.

It’s not only difficult for FHA Buyers to find a property and get an offer accepted but….they pay more. That’s right, the folks who can probably least afford it have to pay more to get a home.

Here are some stats I pulled today that will back up that statement.

During the period 1 October to 17 November 2009 there were 162 single family homes that sold  in the Neighborhoods of Poinciana Villages. 30 of these were purchased using FHA financing. 

***Check out this little chart:

Beds Baths Sq Ft List Price Sold Price Price/Sq Ft LP/SP
FHA 3 2 1821 $76,280 $78,880 $43.73 104%
Others 3 2 1847 $70,267 $70,404 $38.63 101%
Difference NA NA (26) $ 6,013 $ 8,476 $ 5.10    3%
 
***Data pulled from the Mid_Florida Regional MLS on 11/17/2009 and is deemed to be reliable.

So what do you think about that? FHA Buyers are getting less house and paying 11% more. Even if you take out the 6% in closing costs assistance FHA Buyers are still paying 5% more….for less house.

Should FHA Buyers be treated like second class citizens? I don’t think so. Maybe Sellers Lenders should have more incentive to help these folks get a home without having to pay more than others. OR…maybe Buyers need to save more money before getting into the housing  market.

What say you?

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

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Bryant Tutas
Broker/Owner
Tutas Towne Realty, Inc
Licensed Florida Real Estate Broker
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