As someone who appreciates government officials looking out for the tax payer, it’s good to see that FHA is likely to be collecting one more point on each loan they give out to help cover the cost of the insurance. Since so many loans are blowing up on the FHA, it makes sense that they would do this. That said, this will continue to increase the cost of getting a loan which means a fewer buyers and of course fewer sales. See this Calculated Risk post for a quick synopsis.
The median home price in the Twin Cities is $168,000 according to the latest statistics from the Minneapolis Area Association of Realtors. This means on average, the costs to attain an FHA loan just went up about $1,600 if this bill passes.
There is no housing market without the FHA – not in the Twin Cities. If the FHA implodes we will see another down leg in home prices.