Cuts to FHA Mortgage Insurance Premiums Expected to Support Mortgage Insurance Fund and Preserve Homeownership

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HUD will decrease Mortgage Insurance Premiums by 25 Basis Points in Early 2017. Union Home Mortgage Corp. anticipates positive impact on homeowners.

The Department of Housing and Urban Development (HUD) is making final cuts to FHA Mortgage Insurance (MI) premiums before changing administration. Active January 27, 2017, the annual MI fee will be lowered by 25 basis points to a total of 60 basis points.

Current residing HUD leadership believes this reduction is possible due to the continual health and fiscal security of the fund over the past four years.

After an annual fee cut in early 2015, the FHA exceeded its statutory 2% minimum capital requirement while simultaneously experiencing a spike in mortgage applications. Considering today’s risk environment, this timely cut is expected to further protect the MI fund moving forward.

In addition, a decrease in MI annual fees has the potential to encourage and continue to stabilize homeownership. The FHA projects new premium rates will save FHA-insured homeowners with a closing or disbursement date on or after January 27, 2017 an average of $500 this year alone.

The FHA anticipates the premium cut to broadly increase the ability to attain mortgage credit, as well as lower housing costs for those expected to purchase a home or refinance with FHA-insured financing in 2017.

To learn more about this change and to view a full breakdown of these MI premium cuts, please click here. To discuss your options with a mortgage professional to learn how these changes can affect your homeownership goals, please visit

HousingWire. January 9, 2017. FHA cuts mortgage insurance premiums again

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Gina Simpson
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