WASHINGTON, D.C.—Ginnie Mae applauds the recent announcement from the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA) to reduce the annual mortgage insurance premiums (annual MIP) it charges homebuyers for its mortgage insurance from 0.85 percent to 0.55 percent for most new borrowers.
We support this important step that the FHA has taken to address affordability. With the reduction of the annual MIP, an average FHA borrower purchasing a one-unit single-family home with a $265,000 mortgage will save approximately $800 this year as a result of FHA’s pricing change. Those with higher loan amounts could potentially save more.
This action can put homeownership in reach for more home buyers by lowering housing costs and making it more attainable, especially for low- and moderate-income households. A reduced annual MIP increases affordability and provides payment savings amidst rising costs of housing and high market interest rates.
I am grateful to the Biden-Harris Administration for taking this crucial step to make homeownership affordable for millions of Americans and first-time and first-generation homebuyers, who have been blocked from opportunities to build generational wealth. The reduction is a testament to the Administration and HUD’s efforts to increase access to homeownership, promote housing stability, and address longstanding disparities, especially in underserved demographics and communities of color. This step is important in our goal of creating a more equitable housing finance system.
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About Ginnie Mae
Ginnie Mae is an entirely government-owned corporation that attracts global capital into the housing finance system to support homeownership for veterans and millions of homeowners throughout the country. Ginnie Mae Mortgage-Backed Security (MBS) programs directly support housing finance programs administered by the Federal Housing Administration, the U.S. Department of Veterans Affairs, the U.S. Department of Housing and Urban Development’s Office of Public and Indian Housing, and the U.S. Department of Agriculture’s Rural Housing Service. Ginnie Mae is the only MBS to carry the explicit full faith and credit of the United States Government.