Obama to reduce FHA mortgage premium rate to spur buying
WASHINGTON - First-time homebuyers whose home loans are guaranteed by the Federal Housing Administration would benefit from an Obama administration move to lower mortgage insurance premiums.
Under the plan, the housing administration will reduce annual mortgage insurance premiums by 0.5 percentage points, to 0.85 percent. The White House said Wednesday the reduction means new home buyers would pay $900 less a year than they would without the change.
The rate drop announcement will be a centerpiece of President Barack Obama's trip to Phoenix Thursday.
Current homeowners who refinance into an FHA mortgage would also benefit from the change.
Even with the reduction, the new 0.85 percent premium is higher than historic norms. The rate was initially increased to raise FHA capital reserves which took a hit during the housing crisis.
Desktop NewsClick to open Continuous News in a sidebar that updates in real-time.
Interest rates going up while home sales may be going down
New bridge legislation awaiting final step
Baton Rouge teens gearing up for summer jobs with the Mayor's Youth...
Graduation chaos during area HS ceremony this week
Second teen arrested in shooting that wounded pregnant woman near Istrouma High...