The quote below, taken from Pulte’s third quarter earnings call, demonstrates how critical the FHA has been to propping up the housing market. With its recent acquisition of Centex Homes, Pulte is the largest homebuilder in the US and an excellent proxy for the industry.
FHA loans were approximately 43% of loans funded from the financing line in the third quarter [Note: Pulte, like many public builders owns its own mortgage company] compared to approximately 34% in the second quarter of 2009. FHA loans in the quarter for Pulte, on a standalone basis represented 35%; in Centex it was 60%.
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