Homebuyers and homeowners in Rhode Island and other states, should expect to have their annual mortgage insurance premiums increase on new purchases and refinances on loans guaranteed by FHA. (Federal Housing Authority)
On June 10, 2010, The House of Representatives approved by a 406-4 vote the Federal Housing Administration Reform Act, a law designed to put the agency on firm financial footing, which now guarantees nearly one-third of the nation’s mortgages.
The new law gives FHA the authority to raise the ceiling on the annual premiums it charges borrowers for its guarantee, raises the limits on multi-family housing in certain high cost communities and in elevator buildings, and authorizes some previously announced provisions to increase enforcement of FHA lenders.
Currently monthly mortgage insurance premiums are calculated by using 0.55% of the unpaid loan balance, divided by 12. The recently approved H.R. 5072 bill provides for an increase in monthly premium of up to 1.50 percent. Despite the ability to charge 1.50 percent, FHA officials say an increase to 0.90 percent would be sufficient to self-insure its loans.
So what does this mean to Rhode Island homebuyers?
If you had a $200,000 mortgage, the math to a homebuyer would look as follows:
“This bill is critical to our economic growth and families across America seeking to realize the American Dream,” said Rep. Yvette Clarke of New York. “These reforms will help rebuild the housing market, while protecting families from the sort of mortgage scams and fraud that devastated the economy and caused so many to lose their homes.”
The Federal Housing Administration Reform Act will save taxpayers $2.5 billion over five years and make crucial reforms to strengthen the operation of the FHA, which has helped 37 million Americans buy homes since 1934. The bill al
Lynda Mckenzie
RI license#137627/NMLS#137627
Direct: 401-524-9796
E-mail: lmckenzie@guaranteedrate.com
Web: http://www.guaranteedrate.com/lyndamckenzie
RI Licensed- 20102682LL
so makes the FHA more accountable by improving its internal reporting systems and providing greater transparency to the public and Congress.
For more information, please contact me at 401-524-9796 or to apply online please visit my website @ http://www.guaranteedrate.com/Lyndamckenzie
*This is not an offer to lend. 
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