Wow! FHA buyers will be paying 1.2% annually in order to have an FHA-backed loan. That means if the rate is 5%, an FHA buyer will be paying 6.2%. This increase, on top of other increases, has essentially doubled the rate from last summer of .55%. The move is being made to strengthen FHA's capital reserves. What do you think of this?
Thanks to Paul Barton and Todd Huettner for the knowledge!
Here's the official story…
WASHINGTON – As part of ongoing efforts to strengthen the Federal Housing Administration’s (FHA) capital reserves, FHA Commissioner David H. Stevens today announced a new premium structure for FHA-insured mortgage loans increasing its annual mortgage insurance premium (MIP) by a quarter of a percentage point (.25) on all 30- and 15-year loans. The upfront MIP will remain unchanged at 1.0 percent. This premium change was detailed in President Obama’s fiscal year 2012 budget, also released today, and will impact new case numbers assigned on or after April 18, 2011.
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