Waters Praises Castro for FHA Premium Reductions
In response to the U.S. Department of Housing and Urban Development’s (HUD) notice earlier today announcing the reduction of annual insurance premiums on most mortgages insured by the Federal Housing Administration (FHA), Congresswoman Maxine Waters (D-CA), Ranking Member of the Financial Services Committee, praised HUD Secretary Julián Castro for his leadership in strengthening the FHA to carry out its mission to expand homeownership to low income borrowers, minority families, and first-time homebuyers. The decision to reduce premiums by 25 basis points is well supported by FHA’s significantly improved economic health, and the decision is expected to save new FHA-insured homeowners an average of $500 this year.
“Under Secretary Castro’s leadership, the FHA has experienced four straight years of improved economic health, with a gain of $44 billion in value since 2012 and a capital ratio that exceeds the statutorily mandated amount. So I am very pleased that he has taken appropriate steps to ensure that FHA borrowers are not unduly burdened with premiums that add to their monthly housing costs.
In the wake of the financial crisis, the FHA increased its premiums to record high levels to help stabilize the economic health of its Mutual Mortgage Insurance Fund (MMIF). Today’s decision to decrease premiums is reflective of the greatly improved health of the FHA since that time, and helps to restore premium levels to its pre-crisis level.