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| The whole point of FHA is to take MY money and subsidize my competition with a lower interest rate. What gives FHA the bad rap is so many times farmers buy new machinery and land so they "need" the low interest to make it work. Then it still didn't work and loans were written down. Meanwhile the guys that made what they had work by not expanding, or buying new equipment were working a job. Land that came up for rent went to the guy that got the write down because he obviously was a better farmer than the "part time guy" that had to take the town job. He had the life style and machinery to prove it, right?
Back in the 80's there was money available for beginning farmers in our area because of drought. I was paying 27% interest because I was high risk. I had been making my payment plus some but the bank devalued my equipment to 20 % of what I paid for it the year before. I fought the paperwork through to the bitter end. 3 months and hundreds of mile on my vehicle. In the end the money was given to a long time FHA borrower so he could go one last year to make it to Social Security. He had been with Fha since the beginning.
That would have been 3% interest.
What a huge advantage that would have been to the guy that got it! The lucky fellow that could get that money, especially at the cheap rate could rent or buy all he wanted at prices that cash flowed!
My point is that the purpose of FHA is to subsidize some one who cannot make things work, or is merely gaming the system by taking from the ones who do make it work on their own.
On they successful guy getting the write down. Around here that is why people want on the board. People that can pay their bills get write downs because they or their family control the process.
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uncle sam rewarding bad behavior threw fha loans
