In an effort to expand homeownership among new home buyers, President Barack Obama plans to drop mortgage-insurance premiums charged by a government agency.
The annual fees the Federal Housing Administration charges to guarantee mortgages will be cut by 0.5 percentage point, to 0.85 percent of the loan balance, Julian Castro, secretary of the Department of Housing and Urban Development, said during a conference call with reporters.
“We’re going to start this week laying out some of the agenda for the next year. And here in Phoenix, I want to talk about helping more families afford their piece of the American dream, and that is owning their own home,” Obama said during a visit to Arizona. “Buying a home’s always been about more than owning a roof and four walls. It’s about investing in savings and building a family and planting roots in a community.” Obama spoke from Phoenix’s Central High School Thursday morning as part of a weeklong economy-focused tour across the country.
Under the new premium structure, FHA estimates that 2 million borrowers will be able to save an average of $900 annually over the next three years if they purchase or refinance homes. The FHA provides mortgages largely to lower- and middle-income Americans. The White House on Thursday estimated more than 800,000 homeowners stand to save money on their monthly mortgage costs from the reduced premiums.
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