NEWS ALERT: HUD ANNOUNCEMENT REDUCTION IN MORTGAGE INSURANCE
This is great news coming out of Washington! As the nation’s housing market continues to improve, U.S. Housing and Urban Development Secretary Julián Castro, announced the FHA will reduce the annual premiums new borrowers will pay by half of a percent. It is projected to save about 2 Million FHA homeowners an average of $900 annually and incite 250,000 new homebuyers to purchase their first home over the next three years.
In the aftermath of the nation’s housing crisis in 2008, the FHA had increased its premium prices in order to stabilize the health of its MI Fund. Today’s reduction will significantly expand access to mortgage credit for these families and is expected to lower the cost of housing for the approximately 800,000 households who use FHA annually.
FHA’s new annual premium prices are expected to take effect towards the end of the month. FHA will publish a letter detailing its new pricing structure in the days to come.
With mortgage rates increasing slightly, this should help the FHA Home Loan borrower with their monthly payments. The rates are still hovering at half of the average mortgage rate of 8+% over the last 40 years. So, with that perspective, borrowing money to purchase a home continues to be affordable.
If you have any questions regarding this announcement, please feel free to call us. Thanks for watching, and have a great day.