Federal Housing Administration endorsements of single-family loans fell 24% in the first quarter compared to the fourth quarter, as the slowdown in lending is even affecting low-downpayment products.
FHA endorsed $58.2 billion in 1-4 family loans in the first quarter, down from $76.9 billion the prior quarter (based on the calendar year not fiscal year).
The monthly FHA Single-Family Outlook report released early Thursday shows lenders originated $18.3 billion in FHA-insured loans in March, up 8% from February.
Purchase mortgages comprised $10.1 billion of loan production along with $1.8 in FHA-insured reverse mortgages known as Home Equity Conversion Mortgages.
FHA HECM endorsements were stuck at $1.8 billion each month of the first quarter. However, the new HECM Saver product has been gaining traction.
Reverse mortgage lenders originated 409 HECM Savers in March, up from 165 in January. Since this new product was launched last October, FHA has endorsed 964 HECM Savers.
The HECM Saver is attractive to seniors because it has a nominal 0.01% upfront fee, compared to the 2% upfront fee on the standard HECM product.
Meanwhile, very few lenders are using FHA's refinancing products to help underwater borrowers.
Over the six-month period ending March 31, lenders have made 159 Hope for Homeowners loans and 107 FHA Short Refinancing loans. Both products require principal writedowns so the borrowers end up with a loan-to-value ratio below 100%.
