WASHINGTON, D.C. – The Federal Housing Administration (FHA) announced plans to reduce the annual premiums most borrowers pay by a quarter of a percent.
FHA is reducing its annual mortgage insurance premium (MIP) by 25 basis points for most new mortgages with a closing/disbursement date on or after Jan. 27, 2017. The new premium rates are projected to save new FHA-insured homeowners an average of $500 this year.
This reflects the fourth straight year of improved economic health of FHA’s Mutual Mortgage Insurance Fund (MMIF), which gained $44 billion in value since 2012. Last year alone, an independent actuarial analysis found the MMIF’s capital ratio grew by $3.8 billion and now stands at 2.32 percent of all insurance in force—the second consecutive year since 2008 that FHA’s reserve ratio exceeded the statutorily required two percent threshold.
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