Borrowers are flocking to government-insured loans, particularly those offered by the Federal Housing Administration, as they seek to refinance out of costly adjustable-rate mortgages or take out purchase loans with low down payments. The Mortgage Bankers Association says applications for government-insured loans were up 133.9 percent in July from a year ago, while applications for conventional loans like those purchased and guaranteed by Fannie Mae and Freddie Mac fell 50.2 percent. Ginnie Mae, which securitizes FHA loans, is surpassing Fannie and Freddie in issuance of securities backed by fixed-rate mortgages during August, the blog HousingWire.com reported, citing data from eMBS Inc. FHA loans typically have lower down payments than those offered by Fannie Mae and Freddie Mac, the MBA noted, with a 97 percent maximum loan-to-value (LTV) ratio for FHA loans compared with 95 percent for Fannie and Freddie. Conventional loans also tend to have higher credit score requi...
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