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 Mortgage Loan Rates

October 21, 2019
FHA Rates for October 21, 2019
Compare 30 Year Fixed Mortgages
Compare 15 Year Fixed Mortgages
Use our mortgage calculators
to see what you can afford!
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

Five Signs You Are Ready to Buy a Home with an FHA Mortgage

October 1, 2019 - There are plenty of indications that a buyer is NOT ready to buy a home with an FHA mortgage loan, but what tells you it’s time to make the commitment? There are five general signs you can use to determine how close you are to being fully ready.

FHA Home Loan Facts and Figures

September 23, 2019 - In September 2019, the Department of Housing and Urban Development released a housing finance reform plan that proposes to refocus the FHA to its core mission. The report discusses the state of the housing market today, the volume and viability of FHA home loans.

About FHA Mortgage Down Payment Requirements

September 22, 2019 - What do you need to know about FHA mortgage down payment requirements? There are a variety of factors but the most important thing to know is that there are specific rules for the amount, payment, and sources of your minimum required investment.

FHA Texas One-Time Close Construction Loans

September 20, 2019 - FHA One-Time Close construction loans are an important option to consider for those looking for a home in Texas. That market is an excellent place to consider building a home from the ground up with a One-Time Close (OTC) mortgage.

Do You Need Down Payment Assistance for Your Home Loan?

September 8, 2019 - Do you need down payment assistance for your home loan? FHA loan rules permit such help, but the FHA loan program itself does not have a down payment assistance program, even for first-time home buyers.