[quote=ctr70]
FHA and VA have never had super high default rates. So it’s a myth that real estate “used to be” 20% down back in the day or it needs to be 20% down. FHA has never been 20% down and it’s been around since 1934.
[/quote]
Actually it’s NOT a myth that SFRs “used to be” 20% down.
“The median down payment hovered around 20% in the late 1990s and began to creep downward in 2001… It fell as low as 4% in the fourth quarter of 2006, and in some markets came close to zero.”
So, yes, while you’re correct that FHA (and VA) loans were never 20% down… the FHA portfolio is currently a disaster (I can’t speak to the VA portfolio), so… perhaps they should have tightened up during this past cycle. Also, FHA and VA loans have historically been a small part of the market relative to Fannie and Freddie. F&F loans are the “norm.”
So, for the vast majority of the borrowing public, 20% down was the norm during the ’90s… and it sunk down to 4% by 2006. You’re simply wrong here.
