FHA Commissioner, David Stevens announced a new premium structure for 15 and 30 year FHA-insured mortgage loans to begin on or after April 18^th, 2011. 

photo credit: Casey Serin

The new proposed structure is part of an ongoing effort to bolster capital reserves and help private capital return to the market. The annual mortgage insurance premium (MIP) will increase a quarter of a percentage point. The upfront MIP will remain unchanged at 1.0 percent.

This change was detailed in the Obama Administration's 2012 Budget report to Congress which outlined a plan to reform the housing finance system.

Stevens, who began his career in the mortgage business in Denver, said that "This quarter point increase in the annual MIP is a responsible step towards meeting the Congressionally mandated two percent reserve threshold, while allowing FHA to remain the most cost effective mortgage insurance option for borrowers with lower incomes and lower down payments." New FHA borrowers will see an average increase of $30 in monthly payments. 

President Obama's budget states that the FHA will insure $218 billion in mortgage borrowing in 2012, supporting new home purchases and refinancing.

Read the full story at HUD.GOV.

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Posted in MBI Advantages, Buyer Resources, Real Estate Market Conditions, Headlines

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