|
|
Article: Credit History and the FHA-Conventional Choice.
- Article from:
- Real Estate Economics
- Article date:
- June 22, 2000
- Author:
CopyrightCOPYRIGHT 2000 American Real Estate & Economics Association. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
Anthony Pennington-Cross [*]
Joseph Nichols [**]
Models explaining whether households choose conventional or FHA mortgage financing typically use differential insurance premiums, loan-to-value (LTV) and payment-to-income underwriting standards, and local economic conditions to explain household behavior. Using a large and geographically diverse sample, we expand the standard choice model by including measures of borrower credit history. We find that the ability of a homebuyer to avoid credit problems is an important part of the FHA-conventional choice. In addition, credit scores of FHA borrowers are worse on average than those of conventional borrowers, ...