A group of congressional Democrats sent a letter to Department of Housing and Urban Development Secretary Ben Carson on Monday, urging him to reinstate the previously scheduled cut to Federal Housing Administration mortgage insurance premiums.
News about FHA mortgage insurance premiums shocked the market back in January since it was one of President Donald Trump’s first orders of business after being inaugurated on Jan. 20.
HUD sent out an announcement just an hour after Trump was sworn in, stating that the cuts have been suspended indefinitely.
The letter, found here, stated that the FHA will issue a subsequent mortgagee letter at a later date should this policy change.
The suspension put a halt to one of the Obama administration's final moves before leaving office, announcing a cut to FHA mortgage insurance premiums, marking the second time it reduced premiums in two years.
According to the FHA at the time, it would’ve cut the annual mortgage insurance premiums most borrowers pay by one-quarter of a percentage point, or 25 basis points.
However, now in July, the suspension still stands, with no information on when this will change, causing Democratic congressmen to ask Carson to retake a look at the cut and make a decision.
Rep. Joyce Beatty, D-Ohio, spearheaded a letter and was joined by 20 Democratic members of Congress, calling on Carson to lower the FHA annual mortgage insurance premium rates by 25 basis points.
“Homeownership is the cornerstone of the American Dream,” Beatty said. “Unfortunately, as a result of the 2008 financial crisis, homeownership is out-of-reach for far too many families, especially Millennials and minorities.” Beatty continued, “Lowering the FHA MIP rates, at a time when homeownership rates are at a 50-year low, will remove unnecessary financial barriers, making homeownership a reality for more Americans and helping more lower- and middle-income families build wealth at the same time.”
Below a brief snippet from the full letter, which can be found here:
“As you continue to analyze and review your decision as to whether or not to lower the annual MIP rates, we implore you to consider the following: the financial strength of the MMIF, historically low homeownership rates and the potential impacts on the economy. As you publicly stated last month, homeownership “is the foundation of the economy, the spark for vast investment, lending and finance.” The time to ease the financial burdens on homeowners and prospective homeowners trying to realize their American dream has long since passed and the time to lower the annual MIP rates is now.”