Non-conventional loans are most popular in the South Atlantic and West South Central Divisions of the U.S. according to a recent analysis of the 2017 Census Bureau Survey of Construction (SOC), by the National Association of Home Builders  (NAHB).
The analysis  indicated that despite its popularity in these regions, non-conventional loans accounted for less than a third of the overall mortgage loan market at 30.8 percent. According to the NAHB, non-conventional financing options include loans insured by the Federal Housing Administration (FHA), VA-backed loans, cash purchases and other types of financing that ranges from loans by the rural housing services to loans from individuals, state, or local government mortgage-backed bonds.
Nationwide, the analysis revealed, FHA-backed loans were most preferred by borrowers looking at non-conventional finance methods. These loans accounted for 12.2 percent of market share for the financing of new home purchases. Regionally, FHA-backed loans were popular in the South Atlantic, West South Central, and Pacific divisions.
"FHA loans are 19.6 percent of the market share in South Atlantic, which is the highest FHA-loans share in the country and 13.6 percent in West South Central division, and 12.8 percent in the Pacific division," the NAHB analysis said.
The New England division reported the lowest FHA-backed loans at 0.6 percent, where cash financing is the most popular non-conventional financing method. The analysis found that more than a quarter of all new homes were purchased with cash. Cash purchases also led non-conventional financing in the Middle Atlantic division with 15 percent of all new homes purchased using this financing method.
In the South Atlantic though, only 5.7 percent of single-family starts were financed with cash.
VA-backed loans were most used in the Mountain division, which accounted for 13 percent of non-conventional forms of financing. This is over thrice as high as the national average of 4 percent, the analysis found. In East North Central division, VA-backed loans were only 1 percent of market share.