Government-insured loans -- primarily those backed by the Federal Housing Administration -- accounted for about one in three mortgage applications in October, the Mortgage Bankers Association reported. That's a dramatic rise from one in 10 applications a year ago, the MBA said, and the biggest share of applications for FHA, VA and other government-insured loans since February 1991. The MBA cited lower down-payment requirements and less strict underwriting standards for the loans as reasons for their popularity. Another factor was the decision by lawmakers in March to boost FHA and conforming loan limits to $729,750 in high-cost areas for 2008. With those limits set to retrench to no more than $625,500, most high-cost markets will see smaller loan limits next year, the MBA said. The maximum loan-to-value (LTV) ratio for FHA loans is 97, meaning a 3 percent down payment is required, while the Department of Veterans Affairs continues to guarantee some 100 percent LTV loans. ...
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