Tight Credit Conditions Continue to Constrain The Housing RecoveryTight Credit Conditions Continue to Constrain The Housing Recovery

By Jordan Rappaport and Paul S. Willen

The expansion of Federal Housing Administration lending has let households with imperfect credit or the inability to make a large down payment maintain access to mortgage borrowing. Rather than excluding such households, lenders have been applying strict underwriting conditions on all borrowers. Clarifying what constitutes approved lending may help relax credit conditions with minimal increase in risk.

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