FHA Prepares for 2017 Housing Boom by Raising Loan Amounts and Lowering Fees
January 9, 2017
by Dean Henderson
After several years of stifled growth held back by ever increasing layers of burdensome government regulations, a new optimism for consumer confidence in housing will be aided by policy changes in the United States Department of Housing and Urban Development(HUD).
The Federal Housing Administration(FHA) has announced that in 2017 the maximum loan amounts for FHA mortgages will be increased in the high-cost California areas of Los Angeles and Orange Counties from $625,500 to $636,150.
In addition to the increased loan amounts FHA has also announced it will decrease the amount of monthly mortgage insurance charged on FHA loans by 25 basis points on most mortgages beginning the week after the new administration takes office.
In the Antelope Valley, most first-time homebuyers utilize the 3.5% down payment FHA program which currently has an annual mortgage insurance factor of .85%. This will be reduced to .60%. Assuming an average sales price of $269,000 the monthly mortgage insurance premium will be decreasing from $182.33 to $128.71 which is a savings of over $53 per month or $643 per year. This could increase the buying power of homebuyers by approximately $8,000.
Ed Golding, HUD’s principal deputy assistant secretary for housing said, “Homeownership is the way most middle class Americans build wealth and achieve financial security for themselves and their families. This conservative reduction in our premium rates is an appropriate measure to support them on their path to the American dream.”
The FHA said that the premium cut “will significantly expand” access to mortgage credit and lower the cost of housing for the approximately 1 million households who are expected to purchase a home or refinance their mortgages using FHA-insured financing in 2017.
For a full breakdown of the premium cuts, click here for the details from HUD.
For more information of FHA Home Loan please contact:
Dean Henderson, CRMS
President, Financial Indepedence Mortgage