January 8, 2015
WASHINGTON – As the country’s home market continues to improve, U.S. Housing and Urban Development Secretary Julian Castro today announced the Federal Housing Administration (FHA) will reduce the annual premiums new borrowers will pay by half of a percentage. This action is projected to save more than two million FHA homeowners an average of and spur 250,000 new homebuyers to buy their first house over the next three years.
FHA’s recent yearly report to Congress shows the economic condition of the agency’s single-family insurance fund continues to improve, adding $21 billion in value over the past two years.
These attempts have made it possible while also ensuring FHA continues on a favorable fiscal trajectory to take this wise measure. By bringing our premiums down, we are helping people lift themselves up to allow them to open new doors of opportunity and reinforce their financial futures contract.
In the wake of the nation’s housing crisis, FHA increased its premium prices to stabilize the wellness of its MMI Fund. Moreover, the Obama Administration took dramatic things to do in order to safeguard consumers in the mortgage marketplace to make sure responsible borrowers continued to have access to mortgage capital as many private lending sources tightened their lending standards.
Today’s reduction will significantly expand access to mortgage credit and is anticipated to reduce the cost of home for the approximately 800,000 homes who use FHA annually.
FHA’s new annual premium costs are expected to take effect near the finish of the month. A mortgagee letter detailing FHA’s new pricing structure shortly will be published by it.