More Millennials Qualifying for Conventional Mortgages

Ellie Mae, Pleasanton, Calif., said more than two-thirds of all closed loans to Millennials in January were conventional, the highest percentage in two years.

The company’s monthly Millennial Tracker said 67 percent of all closed loans by Millennial borrowers were conventional, which continued to be the most popular loan product, although women were slightly more likely to take advantage of FHA loans (32 percent vis. 27 percent).

“Historically we have seen Millennials look to FHA programs to help address their home buying needs, but in the past two months, FHA loans have represented less than 30 percent of the total loans for Millennials,” said Joe Tyrrell, executive vice president of corporate strategy for Ellie Mae. “We view this as an indication that more Millennials are qualifying for conventional mortgages.”

Other key findings:

–Top metro areas for Millennial women homebuyers in January included La Crosse, Wis.; St. Cloud, Minn.; Green Bay, Wis. Top metros for Millennial men were in the Southeast and included Fairmont, W. Va., Owensboro, Ky., and Macon, Ga.

–Purchases accounted for 81 percent of all closed loans to Millennials in January, down from 84 percent in December. Refinances crept up to 18 percent of all closed loans, having previously held steady at 15 percent since October.

–The average FICO score of Millennial borrowers who closed loans in January increased slightly to 723, up from 722 in December. The average FICO score for women was 725, while the average FICO score for men was 724.

–It took Millennial borrowers 45 days, on average, to close their loans in January, up from 43 days in December. The average time for women to close a loan was 44 days, compared to 45 days for men.