What's Hot: Arlington County Approves Missing Middle Zoning | Move-In Ready Townhomes at EYA's Northeast DC Neighborhoods
What Lower FHA Loan Premiums Mean For Home Buyers

The Federal Housing Administration (FHA) is kicking 2015 off with a bang: The agency this week announced substantial cuts to the annual insurance premiums on its loans.
The FHA will reduce its loan premiums by one half of a percent, from 1.35 percent per year to 0.85 percent. The lowered mortgage insurance rate should save more than two million borrowers $900 a year, on average, as well as prompt 250,000 first-time homebuyers to purchase over the next three years, according to a news release from Housing and Urban Development (HUD).
“This action will make homeownership more affordable for over two million Americans in the next three years,” HUD Secretary Julián Castro said in the release. “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.”
The changes have spurred debate about whether it’s economically sound to lessen restrictions for buyers purchasing homes with down payments as low as 3.5 percent. HUD says it can afford the difference and claims the move will stimulate the economy.
Borrowers who were in the process of financing an FHA loan can cancel and start over to take advantage of the lower rates, HUD announced on Friday.
Zillow took a look at what the lowered premiums might mean for a borrower purchasing a $175,000 home. Here’s the breakdown:

Over the life of a 30-year mortgage, the move could save some borrowers almost $15,000. For higher priced homes, the savings would be notably higher.
This article originally published at https://dc.urbanturf.com/articles/blog/obama_administration_cuts_fha_loan_premiums/9387.
Most Popular... This Week • Last 30 Days • Ever

The 650,000 square-foot project, designed by Adjaye Associates and Hickok Cole, will ... read »

The new development keeps humming along in DC's Buzzard Point.... read »

It is early in the year, but there are already a number of areas around DC where home... read »

Today, UrbanTurf is taking a look at the tax benefits associated with buying a home t... read »

If you are tired of getting lost in their stores, IKEA has a new location planned tha... read »
- A First Look at the Five-Building Centerpiece of the St. Elizabeth's Redevelopment
- The Stacks, Brooklyn Bowling and a Vermeer: The 5 Developments on the Boards for Buzzard Point
- DC's 14 Million-Dollar Neighborhoods in 2023
- A Look At The Tax Benefits of Buying a Home Through a Trust
- IKEA Opening Small Format, Delivery Only Location in Pentagon City
DC Real Estate Guides
Short guides to navigating the DC-area real estate market
We've collected all our helpful guides for buying, selling and renting in and around Washington, DC in one place. Visit guides.urbanturf.com or start browsing below!
First-Timer Primers
Intro guides for first-time home buyers
Unique Spaces
Awesome and unusual real estate from across the DC Metro