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70 70 70 INVESTMENT GOVERNMENT PROPERTY PRESERVATION Journal FHA ANNOUNCES 30-POINT REDUCTION IN MORTGAGE INSURANCE PREMIUMS e U.S. Department of Housing & Urban Development (HUD), through the Federal Housing Administration (FHA), has announced a 30-basis-point reduction to the annual mortgage insurance premiums (annual MIP) charged to homebuyers who obtain an FHA-insured mortgage. e MIP will be reduced from 0.85% to 0.55% for most homebuyers seeking an FHA-insured mortgage, which could mean an estimated savings of $678 million for American families in aggregate by the end of 2023 alone. e reduction will benefit an estimated 850,000 borrowers over the coming year, saving these families an average of $800 annually. "For this country to truly succeed, all Americans must have access to opportunity. at means expanding access to wealth-building and home ownership," HUD Secretary Marcia L. Fudge said. "Today, we are building on the steps we've taken to make homeownership more affordable, and HUD is acting to ensure people feel comfortable purchasing a home as they build toward their future. As we reduce housing costs for people with FHA mortgages, we continue our work to address longstanding disparities in homeownership." HUD's action was designed to help address historic disparities in homeownership, where homebuyers of color have been underrepresent- ed. "FHA's announcement strikes an appropriate balance between assisting homeowners and en- suring the capital reserve ratio and insurance fund remain strong," National Association of Realtors (NAR) President Kenny Parcell said. "NAR has continuously advocated for responsibly reducing mortgage insurance premiums to help qualified home buyers struggling with affordability in the current environment, and we applaud the Ad- ministration for this action. Mortgage rates have doubled over the past year, and home prices have increased more than 30% in some counties. In this competitive market, new and low- to mod- erate-income buyers are often left behind. is reduction will help alleviate some of the financial stress those potential buyers encounter when purchasing a home and allow more people across the country to achieve the American Dream of homeownership." e 30-basis-point annual MIP reduction will apply to almost all Single-Family Title II forward mortgages insured by FHA. Further, the reduction applies to all eligible property types, including single family homes, condo- miniums, and manufactured homes, all eligible loan-to-value ratios, and all eligible base loan amounts. "At a time when budgets are tight and homeownership is out of reach for too many, FHA's premium reduction will allow more households to access the stability and wealth creation of homeownership, particularly the first-time homebuyers and families of color who rely heavily on affordable FHA-insured mortgages," Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon said. "For many families, the savings will make the difference in their ability to purchase the home of their choice." HUD's MIP reduction builds on a range of steps the Department has taken to make home- ownership a reality for more Americans and close the racial divide in homeownership. Other measures the Biden-Harris administration have taken include: • In September 2022, to make it easier for first-time homebuyers to qualify for afford- able FHA-insured mortgage financing, FHA implemented changes to its under- writing policies to permit lenders to use pos- itive rental history as an additional factor in evaluating an applicant's creditworthiness. is change makes FHA's credit evalua- tion more comprehensive, equitable, and supports expanded access to homeownership for first-time homebuyers transitioning from renting. • In June 2022, HUD's Office of Housing launched new online and telephonic search capabilities to significantly increase con- sumers' ability to locate and seek assistance from more than 1,500 HUD-approved housing counseling agencies and the 4,000 HUD-certified housing counselors they em- ploy. e tools are used by more than 3,000 consumers on average each day to obtain housing counseling assistance for topics that "For this country to truly succeed, all Americans must have access to opportunity. That means expanding access to wealth- building and home ownership." —Marcia L. Fudge, HUD Secretary

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