With the improved quality of FHA loans currently being underwritten many have been calling for FHA to lower their MI premiums and it looks like our voices have been heard. We just found out U.S. President Barack Obama is set to announce a 50 basis point reduction of Federal Housing Administration mortgage insurance premiums to 0.85% in a speech to be delivered Thursday in suburban Phoenix, according to Bloomberg.
Since the housing crisis, FHA fees have skyrocketed. The annual insurance premium paid by most FHA borrowers has risen to 1.35%, up from 0.55% in 2010 — or more than $300 a month on a $300,000 mortgage. The higher premiums helped beef up the agency’s cash cushion when its finances took a hit after the housing bust.