FHA Again Reduces Mortgage Insurance Premiums, Lowering Costs for 1 Million Households

Annual mortgage insurance premiums for Federal Housing Administration (FHA)-backed mortgages are lowering toward their pre-bust level, with FHA announcing on Monday another reduction, this time to 0.60 percent for most borrowers. The one-quarter point reduction is expected to save FHA-insured borrowers with a closing date on or after Jan. 27, 2017 an average $500 this year.

“After four straight years of growth and with sufficient reserves on hand to meet future claimes, it’s time for FHA to pass along some modest savings to working families,” said U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro in a statement. “This is a fiscally responsible measure to price our mortgage insurance in a way that protects our insurance fund while preserving the dream of homeownership for credit-qualified borrowers.”
money for a new home
FHA raised premiums several times since the recession to keep its Mutual Mortgage Insurance Fund (MMIF) afloat, at a considerable cost to borrowers, and, according to the National Association of REALTORS® (NAR), to the detriment of housing; research by the organization shows that the increases priced out approximately 1.5 million renters. The Fund’s capital reserve ratio is now at 2.32 percent, above the 2 percent requirement.

NAR applauded the reduction, stating it “breathes new life” into FHA-insured mortgages.

“FHA mortgage products exist to serve an important mission: providing homeownership opportunities to creditworthy borrowers who are overlooked by conventional lenders,” says NAR President William E. Brown. “The high cost of mortgage insurance has unfortunately put those opportunities out of reach for many young, first-time and lower-income borrowers. Now, we have a real opportunity to get back on track.

“This is a question of simple math,” Brown continues. “Every time we cut the cost of mortgage insurance, it means more borrowers meet the debt-to-income ratio required to purchase a home. It follows that dropping mortgage insurance premiums…will mean a whole lot more responsible borrowers are suddenly eligible to purchase a home through FHA. That puts more money in the Fund to protect taxpayers, and it puts more families in homes so they can live out the American Dream.”

HUD expects the new reduction to help 1 million households. FHA last reduced premiums in January 2015, which saved 2 million FHA-insured borrowers an average $900 annually.

Source: HUD

Equal Housing Opportunity

Wash D.C. Metro Area is a Top Purchase Market for Millennial Homebuyers, According to NAR

#GoodToKnow A flurry of financial obstacles and lifestyle choices are stalling the journey to homeownership for many young adults, but becoming a homeowner is currently more feasible in some less expensive metro areas with steady job growth and lower qualifying incomes needed to buy, according to new research by the National Association of Realtors®. NAR analyzedContinue Reading

Top Real Estate Agents Are Joining Berkshire Hathaway HomeServices PenFed Realty

Top real estate sales professionals are joining Berkshire Hathaway HomeServices PenFed Realty! Visit this link to learn how you could save closing costs for your clients. whyjoin.penfedrealty.com

Interest Rates Are on the Minds of Consumers in Berkshire Hathaway HomeServices’ Latest Homeowner Sentiment Survey

                                                      #GoodToKnow Overall favorability toward residential real estate holds steady; Millennials, the most optimistic group surveyed, look beyond starter houses to dream homes December 13, 2016  IRVINE, Calif.–(BUSINESS WIRE)–CurrentContinue Reading

Berkshire Hathaway HomeServices PenFed Realty Announces Lisa Korade as Reston and Great Falls Branch Manager

Press release issued Thursday, Dec. 7, 2016 Lisa Korade Leads Reston and Great Falls Sales Agents RESTON, Va., Dec. 7, 2016—Lisa Korade, a successful real estate professional for 17 years, has been named branch manager of the Reston and Great Falls, Virginia offices of Berkshire Hathaway Home Services PenFed Realty. “I am excited to beContinue Reading