The Federal Housing Administration, a division of the U.S. Department of Housing and Urban Development, has recently adopted new guidelines widening the scope of condo purchases eligible for lower down payment loans insured by the government. While that could lead to more members of certain social groups buying a first home, critics fear a new subprime mortgage crisis could be in the making, given the current state of the residential property market.
Another Trump Card Pulled Out
Upcoming elections have a strong influence over politicians which makes ‘end justifies the means’ decisions irresistible. President Trump’s second term is at stake in 2020 and that has already led to increased pressure from the White House on the Fed to further lower interest rates. With almost no inflation, the United States is “needlessly being forced to pay a MUCH higher interest rate than other countries only because of a very misguided Federal Reserve,” the president tweeted last month.
The Fed did cut the benchmark interest rate recently by a quarter percentage point to 2.25%, despite its insistence on being independent from the executive power in Washington. That was the first downward revision in more than a decade. Those who think the dollar is overpriced in a looming trade war hurting American exports and that the U.S. government is paying a high price for its debt have welcomed the rate cut. Others are not so sure about the long-term consequences.
Another pre-election trump card that could garner more votes for the president and improve his image in certain communities came from the latest decision by the Federal Housing Administration (FHA) to make it easier for first-time homebuyers to receive a loan for a new home.