Alabama buyers can now save about $750 per year on the cost of an average home, thanks to the Federal Housing Administration’s recent announcement.
FHA revealed that it will reduce the mortgage insurance premiums it charges home buyers for its mortgage insurance by 30 basis points. On a median-priced home in Alabama of $254,700, this results in an annual savings of $750, and possibly more for those with higher loan amounts.
“We did a great deal of thought and analysis to come up with a number that is meaningful for borrowers and still prudent for the program,” said Julia Gordon, HUD Assistant Secretary for Housing and FHA Commissioner. “This gives them a little bit of room to deal with inflation.”
The Alabama Housing Finance Authority’s single-family administrator, Carrie Hamaker, also hopes the extra cash will help nudge buyers on the fence about making a home purchase.
“An extra few hundred dollars can make a difference to financially strapped homebuyers whose monthly budgets don’t have much ‘wiggle room,’” said Hamaker. “Especially when combined with AHFA’s Step Up down payment assistance or the federal tax credit of a Mortgage Credit Certificate, the savings really start to add up.”
The move was also praised by the Mortgage Bankers Association.
“The lower premiums will expand homeownership opportunities by lowering mortgage payments for qualified FHA borrowers,” said MBA President & CEO Robert Broeksmit. “This will especially help minority homebuyers and low-and moderate-income households who are predominantly served by FHA loans.”
Nearly 25,000 Alabama households have used AHFA’s Step Up and MCC programs to make their home purchases more affordable. Both programs can be used with FHA loans. Visit www.ahfa.com/homebuyers/programs-available for more information.