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Credit History and the FHA-Conventional Choice
Real Estate Economics
  • Anthony Pennington-Cross, Marquette University
  • Joseph Nichols, University of Maryland - College Park
Document Type
Format of Original
30 p.
Publication Date
Blackwell Publishing

Models explaining whether households choose conventional or FHA mortgage financing typically use differential insurance premiums, loan-to-value (LTV) and payment-to-income underwriting standards, and local economic conditions to explain household behavior. Using a large and geographically diverse sample, we expand the standard choice model by including measures of borrower credit history. We find that the ability of a homebuyer to avoid credit problems is an important part of the FHA–conventional choice. In addition, credit scores of FHA borrowers are worse on average than those of conventional borrowers, but as LTV increases credit scores of conventional borrowers deteriorate.


Real Estate Economics, Vol. 28, No. 2 (June 2000): 307–336. DOI.

Anthony Pennington-Cross was affiliated with the University of Pennsylvania at the time of publication.

Citation Information
Anthony Pennington-Cross and Joseph Nichols. "Credit History and the FHA-Conventional Choice" Real Estate Economics (2000) ISSN: 1080-8620
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