Trump Administration Cancels FHA Mortgage Premium Cuts

Filed in Housing Finance by on January 23, 2017 6 Comments

The Trump administration, in one of its first policy actions, issued a mortgagee letter from HUD on Jan. 20 cancelling a decision made by the Obama administration to lower Federal Housing Administration (FHA) annual mortgage insurance premiums by 25 basis points to 0.60%.

NAHB supported the lower insurance premium rates because it would make home loans more affordable, particularly for creditworthy young families and first-time buyers. FHA’s financial reserves have improved during the past two years, and NAHB believes the lower premium structure would help to ease stubbornly tight credit conditions in the mortgage market as well as mitigate the rise in mortgage rates during the past few months.

While the association strongly supports the new administration, NAHB was aware that President Trump would not see eye to eye with us on all housing-related issues.

NAHB remains in constant contact with the administration and will work with the Trump team on this issue as they do their own analysis on the strength of the Mutual Mortgage Insurance Fund. The association will encourage HUD to reinstate the premium reduction in the months ahead.

Meanwhile, NAHB remains fully engaged with the administration regarding important housing concerns, including regulatory reform, housing finance reform and tax reform.

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Comments (6)

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  1. Jan Williams says:

    Trump’s appeal to the working class was to insure a brighter future. And now he cancelled the Obama administration decision to lower the annual mortgage insurance premiums that make is harder for first-time buyers and others with decent credit to buy homes. What a gift to the working people. Jan Williams

  2. TP says:

    Wow, great move if you want to slow the first time and lower income buyers. Couple that with interest rate hikes coming down the pike. Let’s slow sales down some more after they just started rebounding.

  3. Ronald Hughes says:

    Sure will slow it. But the prices will come down. People may buy more. Houses are too high due to easy mortgage qualifying. Trump’s is a better plan.

  4. This is what you get for supporting Donald Trump! If the NAHB thought Trump cared about anyone or anything other than making himself more money … you deserve what you get.

    I own a very small design / build firm in Houston. My husband owned a mortgage company for 26 years in Houston. We know the market, we know all about Dod Frank, we know all about the CFPB, we know all the perils of both housing and financing. Donald Trump will not help the housing industry. His policies will be inflationary. Interest rates will rise. The middle class will suffer. Mid range homes prices will suffer. You will make less money, unless you build only for the very, very wealthy. You should have supported Hillary!!!

    • Jan Williams says:

      We are witnessing a great change for our country. It is hard to believe what has happened. We have to work harder, state our beliefs, and become active. And that is what I am doing. Jan Williams

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