More Americans are turning to their families for help buying their first home.
More than one-quarter of mortgage borrowers who turned to the Federal Housing Administration (FHA) for loans asked relatives for help making a down payment, according to FHA data– as first reported by The Wall Street Journal. That compares with 22 percent in 2011.
While more than 37 percent of FHA purchase mortgages involved down payment assistance, family funding was the biggest source in the 12 months that ended in September, according to the FHA report.
In 2018, the FHA said it insured more than 1 million mortgages for single-family homes – nearly 83 percent of which were for first-time buyers. Lower-income people tend to turn to the FHA for assistance because it offers as little as 3.5 percent down for those with a credit score of as little as 580 – lenders for a traditional mortgage prefer a score in the 700 range.
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