Washington, DC – Today, in reaction to President Obama’s announcement that the Federal Housing Administration (FHA) will lower mortgage insurance premiums by 0.5 percentage points for FHA loans, NCRC President and CEO John Taylor made the following statement:
“We applaud President Obama for this positive step, which will be beneficial to working families striving to climb the economic ladder. Throughout its history, FHA has played a key role in helping working people to access homeownership and build wealth through equity. This reduction in FHA mortgage insurance premiums will serve to help make homeownership more affordable and attainable for many families. We are pleased that the administration is showing a commitment to homeownership opportunity.”
“Unfortunately, the administration has not yet eliminated the requirement that most FHA borrowers pay for mortgage insurance for the life of the loan. Typically for conventional loans, when borrowers reach a 20% equity threshold, they have the ability to cancel their mortgage insurance. For most FHA borrowers, this option does not exist. This unfair policy for FHA borrowers ultimately amounts to a poor tax. We call on the administration to end this recent practice.”
“In order stimulate the housing market and ensure broad access for creditworthy borrowers it is also critically important for the Federal Housing Finance Agency to reduce excessive guarantee fees and loan level price adjustments at Fannie Mae and Freddie Mac.”
About the National Community Reinvestment Coalition (NCRC): The National Community Reinvestment Coalition is an association of more than 600 community-based organizations that promote access to basic banking services, including credit and savings, to create and sustain affordable housing, job development, and vibrant communities for America’s working families.