Working with FHA, VA and USDA buyers.

[Bryant Tutas]

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.