A Look At Non-Conventional Forms Of Home Financing

On a national basis, 31.5 percent of buyers used non-conventional forms of financing last year, but that share varied by region.

NAHB explored non-conventional financing, which includes Federal Housing Administration (FHA), VA-backed loans, cash purchases, and other forms of lending such as the Rural Housing Service and Habitat for Humanity.

More than a third of buyers in the South Atlantic, West South Central, Pacific, and Mountain regions used non-conventional financing last year, but only 16 percent of buyers in the East South Central and 20 percent of buyers in East North Central used it.

FHA-backed loans accounted for 13 percent of the market, and VA-backed loans took up 7 percent.

Cash purchased declined one percentage point to 9 percent last year. The vast majority of non-conventional buyers in New England and the Middle Atlantic divisions used cash.

The high prevalence of cash financing in the New England, East North Central and Middle Atlantic divisions can be partially explained by the popularity of custom homebuilding in these divisions, with all three claiming the top three custom home market shares in 2016.

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