FHA MORTGAGES ENJOYING "BACK TO BASICS" BOUNCE IN WASHINGTON MARKETS
FHA-insured Homebuying Activity Up Significantly from Last Year in Bellingham, Bremerton, Ellensburg, Olympia, Seattle, Spokane, Tacoma,
Tri-City, Vancouver, Walla Walla, Wenatchee & Yakima

SEATTLE, WA - With the conventional and sub-prime mortgage markets in turmoil, mortgages insured by HUD's
Federal Housing Administration appear to be enjoying a "back to basics" bounce in markets in Washington.

Through just the first two-thirds of Federal fiscal year* 2008, for example, FHA has insured more home purchase mortgages in Washington – 11,924 - than in each of fiscal years 2007, 2006 or 2005.

Data analyzed by HUD found that, through the first eight months of fiscal year 2008, endorsements of FHA-insured mortgages already had exceeded the total FHA endorsements in each of 2007, 2006 or 2005 in the Bellingham, Bremerton, Olympia, Seattle, Tacoma, Vancouver and Wenatchee metropolitan areas.

Through the first eight months of fiscal year 2008, total FHA endorsements already exceeded total FHA
endorsements in all of 2007 or 2006 - but not 2005 – in the Spokane and Yakima areas. In the Ellensburg, Tri-City
and Walla Walla areas, FHA endorsements through the first eight months of 2008 already exceeded the total
insured in 2007, but not the total FHA endorsements in 2006 or 2005

"Earlier this decade, the volume of FHA-insured mortgages fell significantly as homebuyers took advantage of the terms offered by other lenders, especially subprime lenders," said HUD Regional Director John Meyers. "But as the subprime mortgage market began to have difficulties and borrowers wanted to minimize their risks, more and more homebuyers have been coming back to the safe, smart and sound basics of FHA-insured mortgages."

Approximately half of the increase in volume resulted from the refinancing of conventional or subprime mortgages
into FHA-insured mortgages under HUD's FHASecure program.

FHASecure gives homeowners with non-FHA adjustable rate mortgages (ARMs), current or delinquent and regardless of reset status, the ability to refinance into an FHA-insured mortgage. With FHASecure, the lender will not automatically disqualify a borrower who is delinquent on a mortgage loan, and the lender may offer a second
mortgage to make up the difference between the value of property and the amount owed.

The FHA mortgage insurance fund is supported by premiums charged to borrowers and not by taxpayer funds. Its mortgages are attractive to homebuyers because they require only ay a three percent downpayment and permit
gift and grant funds to help cover downpayment and other closing costs. In addition, FHA has more relaxed credit standards and permits borrowers to carry more debt than private mortgage insurers typically allow.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities, creating affordable housing opportunities for low-income Americans, supporting the homeless, elderly people and people with disabilities and people living with AIDS. The Department also promotes economic and community development as
well as enforces the nations fair housing laws. More information about HUD and its programs is available on the web
at www.hud.gov.

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* NOTE – A Federal fiscal year runs from October 1st through September 30th. Below the data for Federal fiscal year 2008 is from October 1st, 2007 through May 31st, 2008. Data for Federal fiscal years 2005, 2006 and 2007 is from October 1st through September 30th.