HUD IN AN EFFORT TO MAKE HOME OWNERSHIP MORE AFFORDABLE
On Tuesday, February 22, 2023, HUD announced a 30-basis-point reduction to the annual Mortgage Insurance Premium for Federal Housing Administration-insured loans. This will be effective for FHA Title II Single Family forward mortgages, except for Section 247 Loans (Hawaiian Homelands), which do not require an annual mortgage insurance premium, and streamline refinance and simple refinance mortgage loans used to refinance a previous FHA-insured loan endorsed on or before May 31, 2009.
The HUD announcement of the premium reduction includes the following:
“This action supports the Biden-Harris Administration’s goals of making homeownership more accessible and affordable for the nation’s working families, particularly households of color for whom FHA-insured mortgages have been a cornerstone for access to homeownership. This action will help address historic disparities in homeownership, where homebuyers of color have been underrepresented.”
On average, the annual MIP will be reduced from 0.85% to 0.55%. HUD estimates that the reduction will save FHA borrowers on average $800 annually. This is a positive move from HUD to assist and help new buyers with affordable homeownership.
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