The market share of government loans dropped sharply in the first quarter of 1995, to 12% from 17% a year earlier, according to a recent survey.

TRW Redi Property Data, a real estate research group based in Riverside, Calif., has statistics showing the volume of Federal Housing Administration and Veterans Administration loans declined 70% during the first three months of 1995, while originations of all loans declined only 51%.

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