You may not like roller coaster rides but may find your self on one nonetheless, if you are a home owner because real estate is set to drop this year after recovering some of its 2008 gains.

With a drop of 10-15% anticipated, the coming price drop has been pushed by a combination of federal factors that are combining for the perfect storm in real estate.

Here it is three years after the peak and it’s still all about housing, said David Rosenberg, an economist at Gluskin Sheff & Associates in Toronto. The outlook for the market is extremely clouded.

Increasing its loan standards may seem counter intuitive to anyone who is familiar with the function of the FHA, and the changes it is proposing will make getting a home loan a little harder.

Using the huge number of loan defaults, the FHA reasoned that raising the required down payment for buyers with the lowest credit, increased the PMI premiums for its loans, and reduced the amount of seller pre-paids and closing costs allowed.

Conventional loan programs are having a hard time placing loans with qualified borrowers, who are turning to FHA financing for easier loans

For a lot of people the FHA was their only resort, said economist Dean Baker, co-director of the Washington, D.C.-based Center for Economic Policy. With conventional loan sources completing fewer and fewer loans on a daily basis, the necessity for FHA loan programs is increasingly supporting and boosting our real estate market and our economy in general.

With today’s economic hardships being so prevalent, government backed mortgage programs, like the FHA program, are crucial to the real estate market recovery, and help buyers find financing who may not otherwise be able to do so.

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