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Biden-Harris Administration To Make Housing Affordable And Accessible Via Premium Reduction

Biden-Harris administration to make homeownership more affordable and accessible for working families by reduction in premiums.

August 15, 2023

Washington- A 30 basis point reduction will be made to annual mortgage insurance premiums to homeowners obtaining an FHA-insured mortgage as announced by the Department of Housing and Urban Development (HUD). For the majority of homebuyers applying for an FHA-insured mortgage, the premium will experience a decrease from 0.85 percent to 0.55 percent. This reduction has the potential to generate an estimated total savings of $678 million for American families by the end of 2023. Besides this, this reduction will also enable families to save $800 annually.

HUD’s Secretary Marcia L. Fudge said, “For this country to truly succeed, all Americans must have access to opportunity. That means expanding access to wealth-building and home ownership. Today, we are building on the steps we’ve taken to make homeownership more affordable, and HUD is acting to ensure people feel comfortable purchasing a home as they build toward their future. As we reduce housing costs for people with FHA mortgages, we continue our work to address longstanding disparities in homeownership.”

Doing so will make homeownership more accessible and affordable for working families and households of color for whom FHA-insured mortgages have been a cornerstone for access to homeownership. It will also address historic disparities in homeownership.

A range of steps have been taken by HUD and the Biden-Harris Administration to make housing a reality for all Americans. FHAs underwriting policies were also changed to allow the lenders to use positive rental history in evaluating the applicant’s creditworthiness for a mortgage as this will easily qualify the first-time homebuyers. HUD also gave access to tools to make it easy for consumers to find and seek assistance from 1500 housing counseling agencies and 4000 certified counselors. Besides this, HUD changed the evaluation of student loan debt.

Julia Gordon believes that FHA premium reduction will allow more households to access the stability and wealth creation of homeownership when budgets are tight and homeownership is out of reach for many.

The premium reduction will apply to all single-family title II forward mortgages. It also applies to all single-family homes, manufactured homes, condominiums, all loan-to-value ratios and eligible base loan amounts.

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The content provided in this article draws inspiration and includes quotes from various reputable sources, including news articles, government data, and interviews. Affordable Housing 411 strives to ensure accuracy and credibility, but the information presented may be based on some external sources. We encourage readers to refer to the referenced materials for more in-depth insights and verification.

Department of Housing and Urban Development. “Biden-Harris Administration To Save FHA Homebuyers Average $800 Annually On Mortgage Payments Through Premium Reduction”. HUD, February 22, 2023,
Biden-Harris Administration to Save FHA Homebuyers Average $800 Annually on Mortgage Payments Through Premium Reduction | / U.S. Department of Housing and Urban Development (HUD)

Last Updated: September 20, 2021