Some interesting news broke last Thursday. President Barack Obama announced plans for the FHA (Federal Housing Administration) to take steps to reduce the annual insurance premium for new borrowers. This will potentially drastically change the way upcoming years of home buying looks like. The plan is estimated to be enacted on January 26th, 2015. This is one way in which the White House is attempting to establish a firm footing in the area of housing (in response to the housing crisis).
With the new reduction plan, one can expect the following:
- Annual premiums being reduced by half of a percent (1.35% to 0.85%)
- Over two million FHA homeowners saving (on average) $900 a year
- An easier environment in which to purchase homes over the next few years
Housing and Urban Development Secretary Julián Castro stated the following in regard to the policy adjustment:
“This action will make homeownership more affordable for over 2 million Americans in the next three years. By bringing our premiums down, we’re helping folks lift themselves up so they can open new doors of opportunity and strengthen their financial futures.”
It shall be interesting to see where this decision takes the housing industry in the upcoming years. Most certainly, it will make a change in the dynamics of the process and hopefully make buying a home easier.
If you would like to read the official White House press release regarding this matter please click here.
If you are looking to purchase a home or are looking for more information on these FHA changes, click here to contact one of our Licensed Mortgage Loan Originators today.