Unlock Your Homeownership Dream
PMI Reduction:
Biden-Harris slashes FHA PMI, saving homeowners $800/year.
Affordable Housing:
Lower PMI makes homeownership affordable for more.
Financial Stability:
Responsible finance enables lasting premium cuts.
FHA PMI Payments Decreased by Government Initiative
In a move to make homeownership more attainable, the Biden-Harris Administration has initiated a reduction in mortgage insurance premiums for FHA-approved first-time homebuyers. This decision underscores their commitment to housing affordability, aiming to lower the monthly financial burden tied to homeownership. It is specially designed to invite more first-time buyers into the market, making the dream of homeownership a reality for more people.
Commonly Asked Questions
What Is an FHA Loan?
FHA loans are government-backed loans designed to help homebuyers with lower credit scores and smaller down payments to secure housing. Typically reserved for first-time homebuyers, FHA loans are among the most affordable on the market, but they do tend to come with higher interest rates and require private mortgage insurance. FHA mortgages are still through a third-party lender and are merely insured by the FHA.
How Much Am I Really Saving?
Before this action, if you purchased a home under previous FHA regulations, your PMI premium would be .85% of the cost of the loan. For example, if you took out an FHA loan for $200,000, under the original percentage, you’d have a monthly PMI of $142. With the reduction, your monthly PMI drops down to $92. The simple calculation is a savings of $25 per month for every $1000,000 borrowed.
Who Qualifies for Reduced PMI?
Government-backed loans are meant for what lenders may consider riskier clients, but there are still restrictions as to who can qualify. FHA loans typically require a minimum of a 580 credit score and a 3.5% down payment or a 500 to 579 score with a 10% down payment. Applicants should have a debt-to-income ratio less than 43% and be able to show proof of employment. FHA loans are also only permitted on the borrower’s primary residence.
Where Will I See The Reduction?
It’s important to understand that this new FHA action doesn’t reduce the principal or interest of your mortgage payment. The .30% reduction is exclusively for the private mortgage insurance (PMI) payments, so the amount you save will depend on the cost of the home you’re purchasing.
Are There Limits to FHA Loans?
While the FHA sets a national “floor” and “ceiling” limit for mortgages, limits change statewide based on the median home price of the area. As of December 1, 2022, the FHA set a floor limit of $472,030 and a ceiling limit of $1,089,300.
What Our Clients Have to Say
"Excellent assistance, the best thing that could have happened to my family and me. Andreina helped us with so much patience and love for her work. I completely recommend her without a doubt, as she will help anyone in need to buy a house by providing them with excellent service, professionalism, and above all, kindness and patience. God bless you Andreina. Thank you for your help; my family and I are very grateful."
– D Omar Ortega
Ready to Benefit from These Exceptional Rates?
While this opportunity may seem too advantageous to be true, we assure you it's bona fide. Reach out to Sasso Realty Group today to unearth more about this fresh federal initiative, ascertain your eligibility, and initiate the search for your dream home. Our expertise lies in assisting first-time homebuyers and we're proficient in guiding you through the FHA application process to make your inaugural home purchase a breeze.