Vice President Kamala Harris on Wednesday announced a new action by the U.S. Department of Housing and Urban Development (HUD) to lower costs for homebuyers across the country.
Under the new action, HUD moved to reduce its annual mortgage insurance premium through the Federal Housing Administration (FHA), which insures home mortgages for millions of Americans every year. The new rule reduces annual mortgage insurance premiums by 0.30 percentage points — from 0.85% to 0.55% for most new borrowers — and will take effect on March 20.
On behalf of HUD Secretary Marcia Fudge, Harris delivered remarks at Bowie State University in Maryland highlighting the new action that the agency says will save an average of $800 in 2023 alone for an estimated 850,000 homebuyers and homeowners.
“A home represents financial security, the opportunity to build wealth and equity that can help put your child through college, afford retirement, create intergenerational wealth within your family — that’s what all this represents,” said Harris.
“It is so much bigger than a piece of property. And for so many people then, it is about what they can do to create a foundation for a better future for themselves, for their family and for their community.”
For nearly 90 years, FHA has provided low-income and first-time homebuyers with mortgage insurance that would otherwise be elusive through conventional insurers. According to a 2022 HUD report, 80% of FHA borrowers are first-time homebuyers and more than 25% are homebuyers of color.
Julienne Joseph, a senior advisor at HUD, noted in an interview with theGrio that FHA has “served three times as many Black borrowers as our counterparts.”
Joseph said in determining the new reduction in mortgage insurance premiums, HUD considered the “barriers” many low-income borrowers and borrowers of color encounter when attempting to purchase a home. Those…
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