On Wednesday, President Obama announced a plan that could save homebuyers hundreds of dollars! The plan is for FHA to reduce the monthly mortgage insurance premium from 1.35% to .85% – that would save home owners a significant amount of money every month!
For a mortgage of $200,000 that means a savings monthly of about $83. In 2010, the monthly MI was .55%, or a payment of $91/mo. In 2010, the rate went up to 1.35% and it definitely affected buyers using FHA's program. This savings would help give housing a boost and help our economy.
We have not heard anything specific from FHA yet, but the news release made a comment about this happening at the end of the month. We will know more when we see something official from FHA.
Both Fannie Mae and Freddie Mac came out last month with a 3% down conventional loan, so this will make FHA a little more competitive with Fannie and Freddie's programs.
President Obama also asked FHA to look at cutting red tape and clarifying lending standards. Since the housing crisis in the last few years, lenders have made it more difficult to get a loan and he wants to help address industry concerns.
None of this has an effective date but at least we know it should be coming soon! As soon as I have seen something from FHA, I can update with a definite date!