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

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?

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Bryant Tutas
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