Above image courtesy of Photographer: Matthew Staver/Bloomberg
[Washington, D.C.] Today First-Time homebuyers received more welcomed news at Nancy Pelosi’s (Speaker of the House/D-CA/12th) House of Representatives passed HR2161. Labeled as the “obstruction party” by leaders of the Trump administration the bill was passed and headed to the Senate where members are hoping majority leader Mitch McConnell doesn’t try and high jack the bill. Lately he has proudly accepted the moniker to be known as ‘the grim-reaper.”
The bill essentially can result in borrowers using FHA mortgages saving $5,375 and is based on an average loan of $211,000. Current FHA borrower must pay three percent which is known as the standard rate for mortgage insurance or the program which allows the agency operate. Unlike conventional mortgages where insurance is normally mandated if the mortgage exceeds 80% of the value of the home, FHA mortgage through their mortgage insurance premium (MIP) is mandated regardless of loan to value.
HR2161 would allow borrowers who successfully complete authorized counseling to have their premiums reduced to 2.75%. If passed and Donald Trump signs it into law you could see millions of buyers enter the marketplace.
Many borrowers use FHA insured mortgages as their entry into home ownership. Contrary to popular belief, especially political leaders who have attempted to vilify the program, historically it helped the United States of America define a middle-class standard.