On January 27th, new cuts to the FHA’s mortgage insurance premiums were supposed to go into effect.
The real question, though, is whether or not they’ll stay in effect.
Earlier in the month, Julián Castro, the outgoing Secretary of the Department of Housing and Urban Development, announced a 25 basis point cut in mortgage insurance for FHA borrowers. “After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families,” he said in a press release.
However, Castro said at the time of the announcement that his administration did not consult with the Trump administration on the decision, as it involved market-sensitive information.
The Trump administration evidently took issue with the decision. According to several sources, the January 27th cut will be delayed while new HUD head Ben Carson and his team consider the details. Though some say this is a formality, others say the decision will likely be reversed.
What does that mean for you?
FHA loans are intended to encourage first-time and medium-income borrowers to enter the housing market. Unfortunately for those buyers, a lot is up in the air right now.
While it’s possible the Trump administration will choose to enact the cut after giving it more consideration, any change is now unlikely to go into effect on the 27th, if it does happen at all. If a premium cut is a deciding factor for you and your family, stay tuned for any developments, as there will be more news coming soon. Otherwise, it’s safe to say you shouldn’t put your buying plans on pause.
from Total Mortgage Underwritings Blog http://ift.tt/2k8BPOh
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