The Federal Housing Administration has done it again! On Monday, the U.S. Department of Housing and Urban Development issued a statement that the FHA will be reducing annual premiums to 0.60 percent. This marks the second time the agency has slashed rates in favor of those with limited or less-than-perfect credit. The first one took effect on January 26, 2015.
The new rates come as the agency enters its fourth year of improved economic health. The FHA has gained $44 billion over the last four years.
With the FHA fund at its strongest, USDA Secretary Julián Castro cites said consumers are confronted with higher credit costs due to increased interest rates. The rate cut is intended to provide some measure of relief by making insurance premiums more affordable, at a time when the mortgage fund is stable.
“After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families… This is a fiscally responsible measure to price our mortgage insurance in a way that protects our insurance fund while preserving the dream of homeownership for credit-qualified borrowers.”
FHA’s annual fee is currently at 0.85 percent of the mortgage value. The new rate reduces this figure by 25 basis points and will be applicable to those who ‘ll be taking out new mortgages or refinancing existing ones on or after January 27.
Make the most of your FHA loan today!