FHA MIP Reduction Suspended on Inauguration Day

Today, Donald Trump took the oath of office and now has become the 45th President of the United States.   There is no doubt that his administration will be bringing about change, good or bad, there will be change.  The day is not yet over and we have already begun to see a change affecting the mortgage industry, specifically FHA buyers.  January 9th the FHA announced a reduction in the annual mortgage insurance premium rates (MIP) and there was much buzz and excitement at the potential savings to a borrower.

As of today, it has been indefinitely suspended. (It was set to take affect on January 27th).

As we go through this changing year, rest assured Cornerstone Mortgage and myself will be on top of anything that will affect our clients.  Please don’t hesitate to reach out to me with any questions.

Great News for FHA Borrowers

FHA Loans Just Became More Affordable

In a statement today, the Department of Housing and Urban Development announced that the annual mortgage insurance premium on FHA loans will drop by 25 basis points which is equal to .25% savings to any FHA borrower.  This will help ease the effect of the rising interest rates and give a little more buying power or more room in the monthly housing expense.  (The cut applies to new mortgages with a closing or disbursement date on or after Jan. 27, 2017).


“Dropping mortgage insurance premiums today will mean a whole lot more responsible borrowers are suddenly eligible to purchase a home through FHA,” William Brown, president of the National Association of Realtors, said in a statement.

The FHA said that it projects that its new premium rates will save new FHA-insured homeowners an average of $500 in 2017 alone.

So what is an FHA Loan anyways?

An FHA loan is a mortgage insured by the Federal Housing Administration. Borrowers with FHA loans pay for mortgage insurance through a Mortgage Insurance Premium (MIP), a self-sufficient insurance fund that protects the lender from a loss if the borrower defaults on the loan.  FHA loans are attractive to buyers because they require a low down payment, lower rates and more flexible guidelines.  

Please reach out to me for more information on current FHA Home Loan Rates or to find a loan program that is right for you.

Sincerely,

Chris