Some details have now been released by the Department of Housing and Urban Development ("HUD") regarding the implementation of President Obama's executive order to lower annual mortgage insurance premiums on FHA loans. HUD has released Mortgagee Letter 2015-01 dated 01.09.2015, which can be found HERE. The reduction in insurance rates will be effective for loans assigned a case number on and after 01.26.2015. The reduction will not affect the upfront mortgage insurance premium, which will remain at 1.75% of the loan amount. The annual mortgage insurance premiums will be reduced in accordance with the table below.
It is estimated that the average annual savings for a home buyer will be $900. It is also estimated that the reduction will allow an additional 250,000 potential buyers into the housing market.
The rate reductions are shown in the following table which is an appendix to ML 2015-01. Information on Hawaiian Home Lands loans is excluded, but can be found by following the link above.
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