Thought you might want a heads up on some changes announced today by HUD. Effective on all HUD case numbers pulled after April 18, 2011, HUD is increasing its monthly MI factor by 25 basis points. That equates to a $45 increase per month on a purchase price of $225k.
Last week the Obama Administration released its plan on the future of housing finance. They are uncomfortable with the current levels of government-backed financing and want to reduce their exposure in the market in the future (5-8 years). Currently their market share is about 95% of all residential loans financed. ( I am including FNMA in on this, as they are basically “owned” by the Fed now. )
This HUD decision is, in my opinion, one of the first of many that will serve to disincentivize borrowers from doing FHA loans with government-backed MI and incentivize them to use conventional financing with private mortgage insurance by making the private mortgage insurance companies more affordable.
