FOLLOWING CONGRESSIONAL URGING, HOUSING ADMINISTRATION MAKES HOME MORTGAGES MORE AFFORDABLE, ACCESSIBLE

Reduction in mortgage insurance premiums follows letter from Shaheen, Senate coalition and will reduce costs for first-time homebuyers, boost economy and housing market

January 08, 2015

(Washington, DC) - Yesterday, the Federal Housing Administration (FHA) announced that it will lower annual mortgage insurance premiums by a full half percentage point, thereby lowering a typical first-time homebuyer’s annual mortgage payment by nearly $900. The change comes following  a letter sent last month by U.S. Senator Jeanne Shaheen (D-NH) and a coalition of Senators urging the FHA to lower premiums for homebuyers.

“This is a welcome announcement that will make a real difference for potential homebuyers, the housing market and the economy as a whole,” Shaheen said. “Lowering insurance premiums is a great way to make it easier for people to purchase homes, and I’m pleased that the Federal Housing Administration has acted on this commonsense proposal.”

It is estimated that the higher annual premiums priced out as many 375,000 potential homebuyers from obtaining a mortgage in 2013. The FHA announced yesterday that it would reduce annual mortgage insurance premiums from 1.35 percent to 0.85 percent, and the reduction will result in billions in savings for millions of families in the coming years.