Uncle Sam is greasing the skids for first-time home buyers this year.
The Federal Housing Admin. will trim annual mortgage insurance premiums
for FHA-backed loans by half a percentage point, to 0.85% from 1.35%. The reduction
figures to save typical first-time buyers $900 in their annual mortgage payment.
Existing homeowners who refinance an FHA mortgage will see a similar reduction.
The move will spark sales of entry-level homes, helping the housing recovery.
First-timers accounted for an average of 35% of all home sales before the recession.
In 2014, 29%. The FHA’s new premiums will also pressure private mortgage insurers,
which back loans guaranteed by Fannie Mae and Freddie Mac, to lower their premiums.