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MortgagePolitics & MoneyServicing

The case for (and against) lowering FHA premiums

Industry divided on whether to lower the borrower fees now or later

HW+ HUD

Soon after the Department of Housing and Urban Development released its Mutual Mortgage Insurance fund report, housing finance and policy experts opined on whether the Federal Housing Administration (FHA) should lower the fees it charges borrowers.

The fund, which insures mortgages backed by the Federal Housing Administration, benefited from the same macroeconomic factors that have boosted the broader mortgage market. The MMI fund’s capital ratio at the end of September rose nearly two percentage points to 8.03%, driven by rising home prices and low mortgage rates.

Although HUD could arguably lower its mortgage insurance premiums — which FHA requires its borrowers to pay — there is no sign it has altered its stance from earlier this year. In March, HUD Sec. Marcia Fudge said the agency had “no near-term plans to change FHA’s mortgage insurance premium pricing.”

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3d rendering of a row of luxury townhouses along a street

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