Everything you need to know about President Obama lowering FHA premiums

Speaking at a Phoenix high school Thursday morning, President Obama said he is directing the Federal Housing Administration to reduce annual mortgage insurance premiums by 50 basis points, from 1.35% to 0.85%.

The move, first reported by HousingWire Wednesday, comes despite concerns from the other side of the aisle over its effectiveness whether it would affect FHA’s fiscal standing.

“The thing I’m going to be announcing today is a new policy in which the fees that are charged by the FHA for loans are going to be reduced and could save a family like this, one that’s buying through FHA a home, could save them as much as $900 a year, which obviously makes a big difference if their payment is $900 a month,” Obama said. “It could be a full month’s payment that they’re saving, and that could make all the difference for a family that is owning its first home.”

Obama also said that he believes the move will have major impact.

“…(T)his is going to potentially have an impact over millions of families all across the country.  It should help further accelerate growth in the housing market and stabilizing prices in areas like Arizona that have a long way to come back.  And it’s just one more example of the kinds of steps that we can take to build on the progress that’s already been made,” he said. “Housing has come back, but we can do even better.”

Read the rest of the article here.

Mortgage News