FHA Reduction Rates; A DIP in MIP

Yesterday, President Obama spoke to the nation in front of many in Phoenix, Arizona, discussing topics from jobs & the economy to FHA & homeownership overall.  There were a few key points that are really awesome news for everyone:

“2014 was the strongest year for job growth since the 1990’s… Home sales are up nearly 50% from where they were during the peak of the crisis.  Homebuilding has more than doubled,  creating hundreds of thousands of construction jobs.  Foreclosures are at their lowest level since 2006, while rising home prices have put hundreds of billions of dollars back in the pockets of middle class families. “

“Helping more families afford their piece of the American Dream — owning their home…  Buying a home has always been about more than owning a roof and four walls,  it is about investing in saving, building a family, and planting roots in a community. “

“Starting this month, FHA will lower its mortgage insurance premium rates (MIP) enough to save the new borrower more than $900/year.  That $900 can go towards paying groceries, gas, or a child’s education.”

“Such good memories… with all the work we had to do to save to get there, then fix it up, and a sense of accomplishment that you were building something for your family and future.”

“When my father came back from WWII, this country gave him the chance to buy his first home with a loan from the FHA….  For those that aren’t familiar with FHA, FHA underwrites, it guarantees, it’s the backstop for a lot of loans around the country, especially for middle class folks.”

“Don’t buy something you can’t afford!”

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It was great to hear the President announce help for current and potential homeowners last night. It goes to show that the folks in Washington are still listening to Main Street America. When the Community Home Lenders Association (CHLA) started calling for lower monthly MIP almost a year ago we knew there would be much work to do. Meetings with Seth Wheeler, Special Assistant to the President for Economic Policy, Hon. Carol Galante the Commissioner and Assistant Secretary of Housing for the Federal Housing Administration (FHA) National Economic Council White House Session and Ted Tozer, President of the Government National Mortgage Association (GNMA) in 2014 along with letters and meetings with several members of congress seem to have paid off.

The truth is, FHA has always been one of the safest mortgage products in the history of our country. We feel that the President and Washington have finally listened and are taking strides to ensure that FHA is solidified to stay as a real option for home loans for all Americans.

All in all, the next round of homebuyers are in much better shape today than the past few years.  To be honest, a new homeowner, today, is probably in a better position than in prior years.

                           

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William Giambrone

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