'Going FHA' Back in Vogue

The company - and the FHA - may get a boost from the wave of adjustable-rate mortgages that are resetting to higher interest rates this year and next. Nationwide, about $500 billion in so-called hybrid adjustable-rate mortgages are scheduled to reset in the remainder of this year and next, with an average increase in monthly payments of 30 percent, according to the investment bank JPMorgan Chase & Co.

"We are in a position to reach a lot of those folks whose loans are resetting," said Engram, the FHA official in Philadelphia.

"The market is just ripe right now because people are feeling strapped in these products," he said.

Even so, first-time homebuyers, such as Jean Howley, 44, remain a big part of the FHA mission.

A mortgage broker at GMAC in Horsham steered Howley, a divorced mother of two, toward an FHA loan for a house in the city's Tacony section because she didn't have much money for a down payment. An FHA loan requires as little as 3 percent down, and all of that can be a gift or a grant.

In April, she borrowed $71,435 at a 6.75 percent annual percentage rate.

"It was like signing my life away," she said, but she doesn't regret it. "It's my home. I love it."