What to Know
- The Trump Administration suspended rules that would have cut FHA mortgage insurance premiums this month
- Reports had suggested that first-time homebuyers could have saved up to $700 a year with the premium cut
- The outgoing Obama Administration put the new FHA rules into place just 11 days ago, angering some Congressional Republicans
One of the Trump Administration's first acts was to suspend recent changes that could have made it cheaper for as many as 1 million households to buy a house this year.
On Jan. 9, the Federal Housing Administration issued new guidelines cutting the fees many borrowers would pay to insure their mortgages in cases where they had limited down payments. First-time homeowners in particular would have benefitted from the lower mortage insurance premiums.
Government mortgage funder Ginnie Mae estimated the average borrower would have saved $500 a year in fees. It would have taken effect Jan. 27.
But almost immediately after President Donald Trump took office, those guidelines were suspended. In fact, the link to the Jan. 9 press release on the FHA website now redirects to a new Jan. 20 release.
"FHA is committed to ensuring its mortgage insurance programs remains viable and effective in the long term for all parties involved, especially our taxpayers," the statement said. "As such, more analysis and research are deemed necessary to assess future adjustments while also considering potential market conditions in an ever-changing global economy that could impact our efforts."
Some Congressional Republicans had opposed the fee cut on the grounds that it increased public risk in case of another housing crisis.
Local
Shares in private mortgage insurance companies rose slightly on the news. A lower government mortgage insurance premium would have made it harder for them to compete and potentially eaten into their profits.
