President Will Announce Reduction in MI Premiums

President Obama will announce in Phoenix today that the FHA will reduce mortgage insurance premiums for borrowers who make down payments of as little as 3.5% from 1.35% to 0.85%, the White House has confirmed after reports in the Wall Street Journal and other media outlets. The FHA recently released a report showing its insurance fund had a value of $4.8 billion at the end of September and its capital reserve ratio at 0.41%. Since the report, HUD Secretary Julian Castro and FHA Commissioner Biniam Gebre have been urged to lower the insurance premiums that the FHA charges.

Dave Stevens, CEO of the Mortgage Bankers Association, told CNBC, “It couldn’t come at a better time … I think it will have a definitive impact particularly in the first-time homebuyer market.”   

 In addition, the White House has  released a “Making Homeownership More Accessible and Sustainable” fact sheet.