WASHINGTON —Today, the Biden Administration announced that the U.S. Department of Housing and Urban Development (HUD) is reducing the annual Mortgage Insurance Premium (MIP) by 30 basis points, a change strongly advocated by NHC. Currently, homebuyers pay a MIP of 85 basis points reducing the premium down to 55 basis points for new borrowers seeking FHA-insured mortgages. “Reduction of the MIP is an important step in addressing America’s growing housing affordability crisis. Moreover, it will make a difference in helping first-time homebuyers disproportionately impacted by higher annual mortgage costs,” said NHC President and CEO David M. Dworkin.
According to the Biden-administration, this reduction will save an estimated 850,000 FHA-insured homebuyers $800 a year.
In October 2022, the Black Homeownership Collaborative wrote a letter to HUD Secretary Marcia Fudge urging a meaningful reduction of the annual MIP and the suspension of the life of loan requirement. The Collaborative will continue to advocate to end the life of loan requirement to help homebuyers and homeowners who rely on FHA mortgages, and who are disproportionately people of color.
“Homeownership is an opportunity to build sustainable and thriving communities for working-class families,” Dworkin said. “While we are disappointed that the life of loan requirement was not eliminated, the MIP reduction is an important step forward. We look forward to working with the Administration to further expand homeownership opportunities and build wealth for all homeowners.”
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About NHC: The National Housing Conference is a diverse continuum of affordable housing stakeholders that convene and collaborate through dialogue, advocacy, research, and education, to develop equitable solutions that serve our common interest – an America where everyone is able to live in a quality, affordable home in a thriving community. Politically diverse and nonpartisan, NHC is a 501(c)3 nonprofit organization.