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In an effort to make home buying more accessible for first-timers, President Barack Obama has set out to decrease the Federal Housing Administration (FHA) mortgage-insurance premiums. The annual fees the FHA charges will be dropped by o.5 percentage points, according to two people with knowledge of Obama’s plans.
The announcement is anticipated to be made in a speech in Phoenix on Thursday, according to Bloomberg.
The FHA is required to keep enough money to cover all its projected losses in its $1.1 trillion portfolio and must manage a two percent cushion of its value —a level not projected to come until fiscal 2016.
In the news, private mortgage insurers have taken a nose dive because they can’t compete with the government program.
This is a developing news story.