The Federal Housing Administration plans to consider the question of whether any change should be made to the mortgage insurance premiums after March, according to a Department of Housing Urban Development official.
When asked if the extraordinary health of the Mutual Mortgage Insurance Fund could warrant a cut to premiums during a press conference about the Biden administration’s accomplishments, an official indicated that the answer could hinge on first-quarter performance of loans and the economy.
“We’re pleased with the health of the MMI fund, at the same time we want to be cautious,” said Lopa Kolluri, principal deputy assistant secretary for the Office of Housing and the Federal Housing Administration at HUD.
The mortgage industry has long sought a reduction in FHA premiums that could make homes more affordable to entry-level buyers with limited incomes. Such a move would support the Biden administration’s affordable housing goals, but it would limit the agency’s claims-paying resources.
HUD
While the number of borrowers with payments temporarily suspended due to the pandemic has gotten extremely low, the share of them with Federal Housing Administration loans is relatively high.
“The outcomes…of those are not known,” Kolluri said. “I do believe by the end of the first quarter we’ll have a better indication of what those borrower outcomes look like and at that point, we'll be able to assess all of the options with regards to changes to the insurance premium.”
