Updated 25 days ago on . Most recent reply
Underwater Loans On The Rise?
13% of FHA loans from 2024 are underwater.
21% of VA loans from 2024 are underwater.
That’s despite national home prices rising this year. So what’s going on?
Many of these FHA and VA loans are concentrated in Sunbelt cities where prices have cooled or even declined. Think Phoenix, Austin, Tampa, Las Vegas. . .the same markets that overheated during the pandemic surge.
For borrowers with low down payments and rapid appreciation expectations, a 3–5% dip in value can erase equity fast.
Negative equity isn’t a nationwide story, it’s a localized one. But it’s a reminder that “buying at the top” with minimal skin in the game can hurt when the market shifts, even slightly.
Early signs of trouble or short-term noise in specific metros?
