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Due in part to the higher FHA conforming loan limits and lower credit requirements, the government-insured share of mortgage applications continues to grow relative to conventional mortgage applications, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. Of all mortgage applications taken during the month of October 2008, 32.9 percent were for government-insured loans (consisting mainly of FHA loans) compared to 10.3 percent in October 2007.
 
The government-insured share has increased from 9.4 percent in January 2008 to its current level of 32.9 percent, which is the highest level observed since February 1991. Since the MBA survey's inception in January 1990, the lowest recorded share was 5.8 percent in August 2005 and the highest was 43.8 percent in February 1990.
 
"This increase in the share of government-insured mortgage applications provides further evidence that there are still loans available to qualified borrowers, particularly through the FHA," said MBA's Chairman David G. Kittle, CMB. "The mortgage market remains fully operational and lenders are working to ensure borrowers with sufficient downpayment and good credit have the opportunity of homeownership."
 
Data from the U.S. Department of Housing and Urban Development (HUD) show that the level of conventional to FHA refinance applications has increased 89.2 percent on a year over year basis in October. Likewise, the actual level of refinances from conventional loans to FHA insured loans has increased 144.3 percent on a year over year basis. Based on the MBA survey, application volume for government-insured loans was up 113.6 percent in October from a year ago, while application volume for conventional loans was down 49.7 percent, showing that borrowers are still moving from conventional to government-insured mortgages.