FHA Mortgage Insurance RISING April 1st

South Portland, $229,000

According to Bloomberg.com, as of April 1st, the Federal Housing Administration will increase it’s Mortgage Insurance Premium in an effort to help rebuild it’s insurance emergency fund which has taken a hit over the last few years during the housing collapse (FHA has paid out nearly $37 billion in defaulted mortgages since 2008). This will take effect on April 1st for all new single family home purchases acquiring a 30 year mortgage. This is roughly $5 extra per month on a $150,000 mortgage and will contribute about $1 billion in revenue to FHA.

FHA is a government agency that was formed in 1934 as part of the National Housing Act of that same year. Today, FHA insures roughly one third of all home purchase loans and is greatly utilized by first time home buyers as it offers a low down payment of 3.5%.

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