The Obama administration recently took a powerful step to help our nation’s families that want to become homeowners. The Federal Housing Administration made a 37 percent cut in fees it charges on FHA loans, reducing them from 1.35 percent down to 0.85 percent of the loan amount each year — and in the process reversing the fee hikes FHA imposed in the aftermath of the 2008 housing crisis.
At Eustis Mortgage, we have seen the effect of higher FHA fees every day, as many families who wanted to buy a home were priced out of the market. We have seen the same thing nationally, as FHA loans to buy a home have fallen 44 percent since 2010.
But FHA’s latest action to cut loan fees and make loans more affordable should help between 125,000 and 375,000 more families buy a home this year. Mortgage lenders like our firm stand ready to help homebuyers take advantage of this change. And for those who already have a home, the fee cuts mean that many families can reduce their mortgage payments through a refinancing of their existing loan to a lower rate. Homeowners, the housing market and the economy will all benefit.
chairman, Eustis Mortgage Corp.