MBA Lobbies for Mortgage Insurance Premium Cut
Source: National Mortgage News
Department of Housing and Urban Development Secretary Marcia Fudge is the latest recipient of a letter — this time from an affordable housing coalition led by the Mortgage Bankers Association — asking for a reduction in Federal Housing Administration premiums.
Sent under the banner of the Black Homeownership Collaborative, the missive follows a September letter a group of mortgage industry players headed by MBA sent to the National Economic Council, an advisory panel to the White House.
But the MBA's effort for a cut began last November, following release of the FHA report to Congress on the actuarial status of the Mutual Mortgage Insurance Fund.
"Lowering the annual MIP would help reduce the cost of buying a home with an FHA mortgage, and ending the life of loan requirement would contribute to building wealth through homeownership in the Black community," the latest letter stated.
The Collaborative is looking to create 3 million new Black homeowners by 2030.
As interest rates have risen, the share of FHA applications also has grown because these loans have lower credit qualification standards and only require a 3.5% down payment. Conforming mortgages with loan-to-value ratios over 80% normally require private mortgage insurance. But PMI is cancellable as the homeowner builds equity; FHA insurance lasts until the loan is paid off.
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