FHA Chief: Why It Should Be Easier to Get a Mortgage

Federal Housing Commissioner Julia Gordon discusses policy changes and initiatives to expand access to financing for underserved home buyers at a time of low affordability.

For many first-time and low- and moderate-income home buyers, a loan insured by the Federal Housing Administration is the best product to finance a home purchase. The 3.5% down payment requirement makes FHA-insured loans an important financial tool, particularly at a time of low home affordability, helping more buyers achieve homeownership. Yet many sellers and their agents may decide not to accept offers from FHA buyers based on pervasive myths about such financing, and that can have the effect of creating another barrier to homeownership for underserved consumers.

Federal Housing Commissioner Julia Gordon is on a campaign to dispel misperceptions about FHA loans, such as the belief that they have unreasonable property condition requirements. At the REALTORS® Legislative Meetings in May, Gordon implored real estate professionals to get educated on FHA financing so they can accurately explain their benefits to clients.

Gordon recently sat down with REALTOR® Magazine to discuss how FHA is broadening access to homeownership, not only through its traditional loan products but also by enhancing its property rehab programs and expanding housing counseling resources.

Q: High home prices and mortgage rates, as well as low housing inventory, are sidelining many buyers. What steps is FHA taking to expand mortgage access and make its loans more competitive with conventional financing?

A: The FHA’s role is to serve borrowers who are not served by the conventional market. Homeownership is very expensive right now. So, we’re looking at what areas we can lean into that offer promise for lower-income families. One of the most exciting policy changes at FHA is being able to factor in positive rental payment history in the underwriting and eligibility process. We serve a lot of people who don’t come with a robust credit history. Looking at rental history can help get more households into homeownership.