Proposed reduction in insurance premiums for FHA loans will not happen this month
The Federal Housing Administration (FHA) considers many items when determining whether to cut premiums, including the outlook for the economy, the budget implications of a cut, and determining when is the right timing for a cut. What the FHA didn't consider was Donald Trump.
Soon after being sworn in as president, Trump's administration undid the upcoming reduction in FHA mortgage insurance premiums. The new administration on Friday said it’s canceling a reduction in the Federal Housing Administration’s annual fee for most borrowers. The cut would have reduced the annual premium for someone borrowing $200,000 by $500 in the first year.
The lower FHA mortgage insurance premiums were scheduled to go into effect January 27, 2017. Now that benefit to borrowers is not happening, leaving lenders scrambling to switch gears and notify their borrowers currently in the loan process.
The reversal comes after Trump’s team criticized the Obama administration for adopting new policies as it prepared to leave office. In the waning days of the administration, the White House announced new Russia sanctions, a ban on drilling in parts of the Arctic and many other regulations.
For more details on how a FHA home loan can benefit you, contact Alliance Home Loans, a HUD approved lender.