The United States housing market is facing rising mortgage interest rates and the risk of increased unemployment. FHA will play a key role in making mortgage money available to homebuyers and keeping FHA-insured homeowners in their homes.
At this critical time, NHRC, 28 national organizations, and 91 local agencies petitioned HUD Secretary Fudge to implement two important FHA mortgage insurance pricing reforms:
Lower the FHA Mortgage Insurance Premium by 25 to 35 basis points. This will increase the affordability of FHA-insured mortgages. FHA is the most common mortgage for people of color in the United States and increasing the band of affordability will keep the door of homeownership open for more people.
End the life of loan requirement on the FHA Mortgage Insurance Premiums. This will end a wealth-draining burden for lower downpayment homeowners. This will also reduce the homeowner’s monthly payment, which will help them weather any potential economic downturn. One lesson we clearly learned from the foreclosure crisis is that lower monthly house payments prevent foreclosures. And this will have a positive impact on homeowners of color and help them build wealth.
Since submitting our letter, we have heard that HUD is committed to reducing the MIP pricing and is working on a way to do this in the current budget process. You can read our letter here.
