The U.S. Department of Housing and Urban Development has announced that the Federal Housing Administration loan cut will go live Jan. 26.
Some loans in process may also take advantage of the initiative.
President Barack Obama visited Central High School in Phoenix last Thursday to announce reductions to mortgage insurance premiums in hopes of bringing first-time homebuyers into the market.
HUD said that 30-year FHA-financed loans with less than a 5 percent down payment will decrease from an annual rate of 1.35 percent to 0.85 percent.
For those with more than a 5 percent down payment, the insurance rate of 1.30 percent rate will decrease to 0.80 percent.
The average homeowner is expected to save about $900 annually in mortgage insurance costs.
The cuts will become effective for case numbers assigned on or after January 26, according to HUD.
The first step in establishing a new single-family-FHA case with HUD is to obtain a case number.
Applicants with case numbers within 30 days of the Jan. 26 effective date maybe cancelled to take advantage of the reduced mortgage insurance rates.
For more information, call 800-225-5342.