An hour after President Donald Trump was sworn in, the federal government canceled a reduction to Federal Housing Administration loan premiums that would have saved first-time homebuyers $500 a year.
The U.S. Department of Housing and Urban Development said Friday morning that a plan to lower FHA loan costs by 0.25 percent was suspended indefinitely.
The cut, announced earlier this month, was supposed to go into effect on Jan. 27.
The Trump administration, recognizing that the default rate of FHA loans is higher than other types of mortgages, just raised the cost of homeownership for those that have only 3.5% to put down on a home. It does raise the cost of monthly payments slightly, but it also further protects taxpayers- taxpayers that are on the hook when homebuyers default on federally-insured loans.
~Jim Belfiore
