Yesterday, I traveled with President Obama to Central High School in Phoenix, Arizona where he highlighted the great progress the housing market has made in recent years. When the President took office six years ago, our nation was facing an historic economic crisis, so he acted quickly to stabilize the housing market and protect the middle class. These efforts helped folks stay in their homes, revitalize communities and shape a housing market that’s gaining momentum.
As HUD Secretary, I’m determined to keep this progress going by ensuring that every creditworthy borrower has a chance to achieve their homeownership dreams. Right now, there are too many families who can afford a home, and would love to purchase one, but can’t because the costs of the loan are too high. That’s why we’re taking action. Yesterday, the President announced that the Federal Housing Administration (FHA) will reduce annual mortgage premiums to 0.85 percent. For the typical first-time homebuyer, this reduction will translate into $900 of savings in their annual mortgage payments, money that can be used to pay for a child’s education, to save for retirement or to spend at local small businesses — benefiting the overall economy.
This is critical for the Latino community. More than 60 percent of Hispanics who are first time homebuyers use an FHA-insured loan, so this means big savings for many families. In addition, existing homeowners who refinance into an FHA mortgage will also benefit from lower mortgage payments. In total, this action will help millions of families save billions of dollars in mortgage payments in the coming years, fueling additional improvements in the housing market.
The President’s measures are part of a broader effort to expand responsible lending to creditworthy borrowers and increase access to sustainable rental housing for families not ready or wanting to buy a home. In the coming months, the Administration will be taking additional measures to cut red tape and work with lenders to build on today’s announcement so that the housing market better serves middle class families.
We will continue to do all we can to help folks build better lives, to build a stronger economy and to build a future that provides opportunity for all.