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 July 14, 2020
Are You Watching Your Credit Score?

NOTICE: Some FHA mortgage lenders are substantially raising FICO score requirements during the Coronavirus crisis, even though FHA minimums remain unchanged.


- Improving Your Credit Score Has Never Been More Important -

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

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

VA One-Time Close Construction Loans

June 24, 2020 - Did you know that the VA offers a One-Time Close construction loan similar to the FHA One-Time Close loan? The VA version of the One-Time Close loan allows qualified borrowers to finance both the construction and the permanent mortgage at the same time.

Do FHA Loan Requirements Apply to All Borrowers?

June 17, 2020 - Where basic minimum credit standards are concerned, FHA loan rules apply for all borrowers. One important area where all FHA borrowers are intended to get identical treatment is in the application of Fair Housing law standards. No discrimination is permitted in the FHA home loan process.

Review Your Credit Before You Apply for an FHA Mortgage

June 16, 2020 - Are you planning for your home loan? Starting early as possible is a very good bit of advice for anyone who wants to own their own property, especially if you have never applied for a mortgage before.

The Facts About FHA Credit Requirements and FICO Scores

June 15, 2020 - One in a series of changes implemented by the FHA in recent times is the new standards required for FHA loans regarding FICO score requirements and down payments. A 580 FICO score will now be the minimum borrower requirement.

When the Appraisal Comes in Lower Than the Sales Price

June 14, 2020 - But what happens if you haggle with the owner, agree to a price, and then then FHA appraisal comes in lower than the sales price amount? This can be a problem for borrowers when they don’t fully understand their options for an FHA mortgage.