Quantcast

HUD is making homeownership more affordable for millions of Americans with its plan to cut the mortgage insurance premiums new borrowers will pay. The announcement of a .50% rate drop was projected to spur 250,000 new first-time home buyers to get FHA loans during the next three years.

FHA Rates Near 50 Year Low!

Now is the time to drop the interest rate on your 30-year mortgage or refinance into a 15-year home loan.

FHA Rates for April 5, 2020
Get started one
Get started two
Get started three
Get started four
FHA.com is a privately owned website, is not a government agency, and does not make loans.

Choose a Loan Type

then
get
your

Your Credit Score

Do you know what's on
your credit report?
Get Credit Score Button
Get Credit Score Button
FHA.com is a privately owned website, is not a government agency, and does not make loans.

FHA Mortgage Insurance Reduction of .50% for New Loans in 2015

FHA Loan Borrowers Can See $900 Annual Savings

FHA Mortgage Insurance Premiums (MIP)
FHA Mortgage Insurance Premiums (MIP)

HUD is making homeownership more affordable for millions of Americans with its plan to dramatically cut the mortgage insurance premiums new borrowers will pay. Since 2010, insurance premiums on FHA-backed mortgages have jumped to 1.35%, pricing hundreds of thousands of creditworthy borrowers out of the housing market.

The Obama administration’s announcement of a .50% rate drop is projected to spur 250,000 new first-time homebuyers to get FHA loans over the next three years. This would add to the approximately 800,000 households who use FHA annually. FHA’s premium reduction took effect for mortgages with case numbers assigned on or after January 26, 2015, and did not affect loans that had already closed.

Julián Castro, Secretary of the Department of Housing and Urban Development (HUD), said the reduction will save the average borrower $900 annually. "Since 2009, the Obama Administration has taken bold steps to reduce risks in the mortgage market and to protect consumers. These efforts have made it possible to take this prudent measure while also ensuring FHA remains on a positive financial trajectory. 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."

The increases that took the rate to 1.35% were implemented to stabilize the health of FHA’s Mutual Mortgage Insurance Fund (MMIF). A byproduct of protecting this fund was that it eliminated “a lot of the people that FHA is designed to help, and that’s the lower-income and first-time buyers,” said Chris Polychron, the president of the National Association of Realtors.

Loans backed by FHA are popular because the FICO score requirement of 580 is lower than what is required for conventional mortgages and the down payment can be as low as 3.5%. The lower mortgage insurance premium will increase its appeal as these rates move towards pre-crisis levels. Mr. Castro emphasized, however, that underwriting standards would not be relaxed. Buyers must still demonstrate their ability to qualify for a mortgage and pay it back on time.

See also: Current Mortgage Insurance Premium (MIP) Rates

SEE YOUR CREDIT SCORES   From All 3 Bureaus  

Do you know what's on your credit report?

Learn what your score means.


GET STARTED

FHA Loan Articles and Mortgage News

How Down Payment Grants Can Help You Buy a Home

March 4, 2020 - There are some misconceptions about down payment grants in general, but one of the biggest is that the FHA itself or the lender is somehow responsible for managing or offering these grants. You, the borrower, are responsible for locating the programs in your area.

One-Time Close Construction Loans for Veterans

February 9, 2020 - Veterans have multiple options when it comes to deciding which type of One-Time Close construction loan to choose from.  Military members who cannot occupy the home due to active duty requirements are still eligible for maximum financing.

FHA Home Loan Down Payments: How Much?

January 25, 2020 - The FHA down payment can be as low as 3.5% of the adjusted value of the home. Compare that to the conventional loan 20% down requirement and it’s easy to see why FHA loans might be more appealing. Smaller down payments make sense if you don’t plan to keep the home long-term. 

Down Payment Rules for Home Loans

January 23, 2020 - Some borrowers who work on their credit long before applying for a loan may be eligible for the best down payment terms. You may be required to make a larger down payment if your credit score is too low. Work on your credit aggressively, and as early as possible.

Are You Due a Mortgage Insurance Refund From an FHA Loan?

January 15, 2020 - Some borrowers are, and some are not--much depends on the nature of your mortgage transaction. UFMIP is always required on FHA loan transactions and must be paid either in cash at closing time or must be financed into the loan amount.