SHORT LIST
Uncle Sam to the Rescue
The White House announced a new initiative in January designed to make mortgages more affordable and accessible to creditworthy families who want to purchase a home and can afford it. To reach this goal, the Federal Housing Administration (FHA) reduced annual mortgage insurance premiums by 0.5 percent from 1.35 percent to 0.85 percent. For the typical first-time homebuyer, this reduction will translate into a $900 reduction in their annual mortgage payment.
Existing homeowners who refinance into an FHA mortgage will see similar reductions to their mortgage payments, the Administration says. The rate change is expected to allow millions of families to save billions of dollars in mortgage payments in the coming years and help support the housing market recovery.
More than 800,000 current FHA borrowers are projected to take advantage of these lower rates in the first year, saving millions of dollars overall, the White House says. Further, lowered premiums are expected to create opportunities for 250,000 new homeowners to purchase a home over the next three years.
