Breaking News: FHA Slashes Mortgage Insurance Premiums
Breaking news: The Department of Housing and Urban Development just announced that they will cut the mortgage insurance premium for FHA loans by 30 basis points to a level we haven't seen since before the 2008 housing crisis!
The cut will take effect on FHA loans endorsed on or after March 20, 2023.
The drop from 85 to 55 basis points is estimated to provide a yearly savings of about $800 for FHA homebuyers.
While modest, the FHA's Commissioner Julia Gordon remarked that the cut would give homebuyers "a little room to deal with inflation."
The housing industry has been calling for a reduction in premiums for the past two years, reasoning that it would make the FHA's program more affordable and accessible to homebuyers.
Note that mortgage insurance is required on all FHA loans, regardless of the down payment amount.