Jun 30, 2017

The residential market will begin to see more FHA loans as Millennials increasingly enter into homeownership, according to the latest Millennial Tracker Report from Ellie Mae. Millennials continue to utilize FHA loans, which represent 35% of all loans closed in January, up slightly from 34% in December. And FICO scores continued to slip in January, perhaps showing a loosening of credit standards as the average FICO score for all loan types for Millennials fell to 724. This is down from the peak of 726 from August through October. For purchases, the average FICO score was 748 for a conventional loan, 690 for an FHA loan and 734 for a VA loan. “As the purchase market heats up, we will continue to watch the FHA purchase trend amongst Millennials,” said Joe Tyrrell, Ellie Mae executive vice president of corporate strategy. “It is not surprising to see millennial borrowers leverage FHA loans because they typically offer lower down payments and lower average FICO score requirements than conventional loans,” Tyrrell said. “As more millennials enter the market, we expect to see the popularity of FHA loans continue to increase.” FHA loans can allow down payments to be as low as 3.5% down to a credit score of 580. Source: HousingWire