Newly reduced FHA premiums expand options for homebuyers
The Federal Housing Administration is reducing annual mortgage insurance premiums for FHA-insured home loans beginning March 20, 2023. This is expected to make homeownership more accessible and affordable for many Americans.
Mortgage insurance premiums are fees that borrowers pay to protect lenders against losses in case of default. These fees are typically added to the monthly mortgage payment, and the amount of the premium depends on the size of the loan and the loan-to-value ratio. FHA-insured loans are popular among first-time homebuyers and low-to-moderate income borrowers because they allow for lower down payments and more flexible credit requirements.
The annual mortgage insurance premium reduction is expected to lower the cost of homeownership by an average of $800 annually. A borrower for a single-family home with a national median average mortgage of $467,700 will save more than $1,400 their first year. The reduced rates apply to nearly all Single Family Title II mortgages, including single family homes, condominiums, and manufactured homes at all eligible base loan amounts.
Click here to learn more about FHA’s mortgage insurance premium reduction.