White House announces program to help 850,0000 homeowners and buyers
White House releases details of a new program to assist almost a million homeowners & buyers in bringing down their monthly payments by as much as $800 a year.
Purchasing a home and earning a college degree are some of the last proven ways to build generational wealth in the United States. However, as detailed by the White House, the “nationwide shortfall in the supply of affordable homes” has effectively priced first-time homebuyers out of the housing market in communities across the country.
Today, the White House announced a plan to bring down prices and increase access for “first-generation homebuyers and first-time homebuyers of color.” This announcement comes as the price of a mortgage increases rapidly, creating further barriers for groups “who are less likely to have sufficient resources for a sizeable down payment due to a longstanding gap in intergenerational wealth transfers.”
Bringing down the cost of mortgages
Working through the US Department of Housing and Urban Development and the Federal Housing Administration (FHA), the White House has enacted a new rule to “reduce its annual mortgage insurance premium by 0.30 percentage points, from 0.85% to 0.55% for most new borrowers.”
Such a change is expected to bring down housing costs for around 850,000 homebuyers and homeowners in 2023 by slashing the rates applied to mortgage insurance, which is paid “on top of their monthly principal and interest payments.”
How much will homeowners save?
The expected savings are projected to reach around $800 a year, which could instead be applied to a person’s principal balance to help homeowners pay off their mortgage more quickly.
“FHA-insured mortgages, which accounted for 7.5% of home sales in the third quarter of 2022, are targeted at homebuyers who otherwise may not be able to achieve homeownership,” reported the White House. The move by the Biden administration will reduce the financial burdens many low-and-middle-income borrowers encounter when trying to purchase their first home.
When will the change go into effect?
According to the factsheet realized by the White House, the rate applied to mortgage insurance will go into effect on 20 March 2023.
To be able to comment you must be registered and logged in. Forgot password?