Mortgage Update - March 31st, 2025
The first quarter of 2025 is coming to a close. It was a wild ride to start the year 🎢
Big changes are happening fast, and as always, Nick and I are here to keep you up to date!
Let’s dive into the latest and greatest!
We are posting regular content to Instagram (Nick | Kreg) and Facebook (Nick | Kreg) to help you and your buyers stay informed. Be sure to follow us!
Read time: ~4 minutes
FHA Shuts the Door on Non-Citizen Borrowers 🚫
I am sure y'all heard the news this week in regard to FHA financing. Starting May 25, 2025, FHA will no longer allow non-permanent residents to obtain FHA loans. Previously, FHA loans were among the most accessible, requiring just a 580 credit score and a 3.5% down payment, but moving forward, only permanent residents will qualify.
Additionally, USDA has also ended mortgage eligibility for non-U.S. citizens. 🙁
Nick and I wouldn’t be surprised if Fannie Mae and Freddie Mac (Conventional financing) followed suit with similar restrictions. But for now, no official announcements have been made, so non-citizens can still qualify for Conventional loans with as little as 3% down!
This is definitely a hit to the market—fewer buyers means lower demand. However, it’s important to recognize that the U.S. has historically had some of the most lenient homeownership policies for foreign nationals. The ability for a non-U.S. citizen to secure a zero-down loan was almost unheard of in comparison to other countries.
For perspective, here’s what non-permanent residents must do to buy property elsewhere:
Canada: A ban is in currently in place until January 1, 2027, preventing non-Canadians from purchasing residential property.
Mexico: Requires 20-30% down for non-residents. Foreigners cannot own property within 60 miles of the border or 30 miles of the coast without government approval.
France: Requires 20-30% down for non-residents.
Spain: Requires 30-40% down for non-residents.
Japan: Requires 20-30% down for non-residents.
Australia: Requires 30-40% down and limits purchases to new properties or vacant land to avoid competition with residents.
While these FHA and USDA changes feel like a setback, they actually bring the U.S. more in line with global standards. Many countries prioritize their citizens in housing markets where inventory is tight, so it’s not surprising that the U.S. is taking a similar stance.
Key Takeaway: Despite FHA and USDA tightening their requirements, non-citizens can still access Conventional loans with as little as 3% down! Down payment assistance programs are still available as well. However, it wouldn’t be shocking if Conventional financing eventually follows the same path as FHA and USDA. Only time will tell...
Foreclosure Crisis Ahead? Don’t Fall for the Hype...🙅♀️
It’s amazing how quickly negative news spreads. A recent article circulating on social media this week painted a grim picture of a foreclosure crisis on the horizon, claiming that 6.1 million Americans are behind on their mortgages and that FHA delinquencies have reached 11.03%. Here’s the chart that’s been making the rounds:
First, let's clear this up: this chart is completely misleading. It's referring to delinquency rates for multi-family homes, not single-family properties. Multi-family properties, like apartments, are often financed with adjustable-rate mortgages (ARMs) that reset every 3-5 years. This means they’re going from their current 3-4% interest rate to today’s multi-family market rate of over 7%, effectively doubling the monthly payment. I can personally relate, as I just had one of my own ARMs adjust from 4.25% to 7.25% 🤬. So yes, multi-family homes are at greater risk.
However, this is NOT the case for single-family homes. Delinquency rates on single-family mortgages remain strong and healthy, well below 2%, and nowhere near the levels we saw during the 2008 housing crisis.
Key Takeaway: The recent talk of a foreclosure crisis is based on data about multi-family homes, which are at higher risk due to adjustable-rate mortgages. Single-family home delinquencies are still low, under 2%, and the overall housing market remains strong and stable. Don't let the fear-mongering skew the facts!
Down Payment Assistance: What 🫵 Need to Know
This week, several agents told us they heard down payment assistance programs were being eliminated. Let’s set the record straight: while some federal programs are going away, the core resources Nick and I rely on for our clients are 100% still available!
The programs being phased out are Special Purpose Credit Programs (SPCPs), which were designed to provide targeted financial aid to historically underserved groups. While SPCPs served an important role, most buyers seeking assistance did not use them.
The vast majority of homebuyers who need help with a down payment turn to state bond programs, such as those offered by the Ohio Housing Finance Agency (OHFA). We spoke directly with the director of OHFA, and she confirmed that these programs are here to stay! ✅
HUGE Week Ahead!
Get ready—this week is packed with key events that could shake the markets. With key economic data, Fed Chair Powell speaking, and potential tariffs, volatility is almost certain. Here’s what to keep an eye on:
📅 Tuesday – ISM Manufacturing Data
Weak numbers? Mortgage rates may improve as it signals a slowing economy.
📅 Wednesday – President Trump’s "Liberation Day"
He’s set to roll out new tariffs, which could shake the markets. Whether they go into effect or not, expect some serious volatility.
📅 Friday – March Jobs Report (The most important labor data of the week)
Fewer jobs than expected? Mortgage rates could drop.
More jobs than expected? Rates could climb.
Also on Friday, Fed Chair Jerome Powell speaks. He’ll likely reiterate that the Fed needs to see more signs of cooling inflation before cutting rates. Currently, markets expect no rate cuts at the May 7th Fed meeting, but there’s a 56% chance of a cut on June 18th—this week’s data could shift those odds!
🚨 Stay tuned, because this could be a major week for mortgage rates! 🚨