The Department of Housing and Urban Development (HUD) just announced that the FHA Annual Mortgage Insurance Premiums will be reduced by 30 basis points. Basis points are charged to homebuyers who procure an FHA-insured mortgage.

The Federal Housing Administration (FHA) states that this reduction, which goes into place on March 20, 2023, could possibly save around 850,000 homebuyers who will be getting FHA loans an average of about $800 this year.

FHA mortgage borrowers usually pay 1.75% of their loan amount in upfront mortgage insurance. They then have also paid an 0.85% annual premium, which is added to the monthly mortgage payment. Beginning March 20, 2023, that 0.85% will be reduced to 0.55%.

This is exciting news for homebuyers wishing to purchase a home using an FHA mortgage. Thank you to Business Insider for an article breaking down this reduction and what it means for potential new FHA homebuyers!

If you are considering buying a home in Baltimore, please contact me and I can put you in touch with a lender who can help work through the FHA mortgage insurance premium change and how it may affect you and your homebuying power.