FHA to reduce Monthly Mortgage Insurance Premiums

January 8, 2015

Reduction to increase credit affordability and reflects improved economic health of FHA

WASHINGTON – As the nation’s housing market continues to improve, U.S. Housing and Urban Development Secretary Julián Castro today announced the Federal Housing Administration (FHA) will reduce the annual premiums new borrowers will pay by half of a percent. This action is projected to save more than two million FHA homeowners an average of $900 annually and spur 250,000 new homebuyers to purchase their first home over the next three years.

Today’s action also reflects the improved economic health of FHA’s Mutual Mortgage Insurance Fund (MMIF). FHA’s recent annual report to Congress demonstrates the economic condition of the agency’s single-family insurance fund continues to improve, adding $21 billion in value over the past two years.

“This action will make homeownership more affordable for over two million Americans in the next three years,” said U.S. Department of Housing and Urban Development Secretary Julián Castro. “Since 2009, the Obama Administration has taken bold steps to reduce risks in the mortgage market and to protect consumers. These efforts have made it possible to take this prudent measure while also ensuring FHA remains on a positive financial trajectory. By bringing our premiums down, we’re helping folks lift themselves up so they can open new doors of opportunity and strengthen their financial futures.”

In the wake of the nation’s housing crisis, FHA increased its premium prices to stabilize the health of its MMI Fund. In addition, the Obama Administration took dramatic steps to safeguard consumers in the mortgage market to ensure responsible borrowers continued to have access to mortgage capital as many private lending sources tightened their lending standards.

Today’s reduction will significantly expand access to mortgage credit for these families and is expected to lower the cost of housing for the approximately 800,000 households who use FHA annually.

FHA’s new annual premium prices are expected to take effect towards the end of the month. FHA will publish a mortgagee letter detailing its new pricing structure shortly.


Are you a First Time Homebuyer?

Congratulations on your decision to buy a new home! There are many important things to consider throughout the process, especially if you’re a first-time homebuyer. Here’s some information that will keep you on track.

A home purchase may be your largest financial investment to date, so it’s important to make the right decisions and to keep an eye on the details. With the assistance of your Real Estate Agent and Loan Officer, it should be an efficient, pleasant, and ultimately rewarding experience.

The following information is designed to help you sort out the “Who’s Doing What” of the homebuying process.

Count On Your Real Estate Agent To:

  • Preview available homes to weed out those that are overpriced, or undesirable in some other way.
  • Present the homes that suit your needs as you’ve defined them.
  • Help you determine the difference between a “good buy” and a property which, because of its nature (neighborhood, market appeal, etc.), might have to be discounted if you decide to sell in the future.
  • Negotiate the best deal for you. With a Pre-Qualification letter from Karen Cox at Landmark Professional Mortgage  in hand, your Real Estate Agent will be able to demonstrate that you are a qualified and capable borrower. This will strongly influence the Seller, and may make the difference between the Seller accepting your offer or someone else’s — even if your offer is lower!

Count On  Karen and her team to:

  • Assist you in selecting the best loan to meet your personal situation and goals. (This single decision can save you thousands of dollars throughout the years!)
  • Keep you informed of your loan status throughout the entire process.
  • Keep your Real Estate Agent informed of our loan progress (Note: your personal information is always kept confidential between you and Landmark Professional Mortgage, only status updates and progress are shared).
  • Get the appropriate loan for you at the best rates and fees. This will save you significant money “up front” and throughout the years to come.

Count On Yourself To:

  • Keep your Real Estate Agent informed of any questions or concerns as they develop.
  • Keep the process moving by providing documentation and decisions as soon as reasonably possible. By doing so, many of the details are taken care of early in the process so you can comfortably concentrate on any last-minute details or events that require your attention.
  • Enjoy purchasing your home, but do remain objective throughout — to make the business decisions that are best for you.
  • Make sure you are pre-approved as early as possible. This will put the power of financing behind you so you can concentrate on selecting your home.
  • To understand how your credit affects your loan terms, call Karen at 503 585 1105 to order your free credit report today and have a complimentary review of your credit.  

USDA/Rural Development

Great News!!

USDA announced yesterday that they have authorized the issuance of Conditional Commitments for Rural Housing programs to take place after the current funding is exhausted (which is on pace to happen this week). 


The guarantee fee will increase from 2.0% to 3.5% for purchases, and from 0.5% to 2.25% for USDA to USDA rate/term refinances.  This will help self-sustain the funding for the Rural Housing program going forward.

Please note:  Any files in process that are not able to get a commitment at the 2.0% guarantee fee will have to be re-disclosed at the 3.5% guarantee fee.


September 25, 2009

Greetings! I hope this finds you all happy, healthy and ready for Fall. Kids are back to school, Football season has started and we live in Oregon, the best State in the Country!

As I am sure you know, the mortgage industry is still evolving and changes are occurring at a rapid speed. Some of the more noticeable changes are with the appraisal ordering process, timeline restrictions, programs that have changed or been eliminated and lenders that have disappeared. If you have any questions I am happy to answer them for you, just give me a call or an email.

The BIG push this Fall is the $8000 tax credit for first time home buyers. To qualify for the first time homebuyer credit, borrowers can not have owned a home in the last 3 years and they have to purchase a new home before November 30, 2009. If you have someone you know…family, friends or co-workers, please have them call me and we can get this done before the tax credit expires.

Rates are still at historic lows and some experts believe we may even see a return of rates under 5% in September!

Please call or email me if you have any questions or if you just want to chat!

karen@landmarkmortgage.com  or 503 585 1105 !

8000 Tax Credit

Reminder- that the First Time Homebuyer Tax credit of 8000 expires on December 1, 2009. 

 Let’s back into this timeline- At the time of year that this expires it falls right after the Thanksgiving weekend. Title/Escrow companies and Lenders all take a 4 day weekend for the Thanksgiving Holiday so my advice is to close on a home purchase by November 25th, 2009 to be on the safe side. 

 Many people are out looking for that first time house to take advantage of this credit.  As more people find homes, the industry surges with business, now that is a good thing but that can extend turn times for title, appraisals and for lenders.  I would recommend 45 days for closing so finding a home and submitting an offer by October 15th at the latest would be a safe bet as long as no repairs or problems arise on your file. 

If you find a home after this time line, I am not saying that it can’t be done but that your level of stress will increase and your response times will be more critical to those of the needs of your lender.  Please try and plan accordingly to help all in the process.

 The time of procrastination is over, homes are available, rates are low and the tax credit is calling you.  Call your Realtor & Lender today!!

FHA allowing use of First Time Homebuyer Tax Credit for Purchasing- sort of

Many have heard about the rumor that HUD and FHA will allow the use of the First Time Homebuyer tax credit for purchasing a new home.  Well- yes and no.  The new rules have been released and they are as follows:

Borrowers MUST have their 3.5% into the transaction, the tax credit can NOT be used for the down payment.  The borrower may use the tax credit for closing costs, buying down the mortgage rate or additional down payment. 

The tax credit is “purchased” by an entity or individual for no more than 2.5% of the actual credit so for example, the borrower is allowed the full 8000 credit, they will actually benefit 7800. That is a positive as those looking at purchasing this prior to HUD’s ruling were charging a killing for this!  This person or entity can NOT be someone involved in the transaction.

We must document that the borrower has no other IRS obligation that will reduce their ability to receive the tax credit. We must complete IRS 5405 to determine this.

So- Good news, bad news, borrowers will still need 3.5% down, but now maybe won’t need so much in seller credit?

First Time Home-buyer Tax Credit

I just received the following information (Thank you Carolyn Jackson, CPA, Salem, OR) in regards to the First Time Home Buyer Tax Credits.  2009 is definitely the year to buy your first home (or a home if you haven’t owned one in the last 3 years).   This year the credit will be a true credit and not an interest free loan like 2008.

Expanded Tax Break Available for 2009 First-Time Homebuyers 

 IR-2009-14, Feb. 25, 2009

 WASHINGTON – The Internal Revenue Service announced today that taxpayers who qualify for the first-time homebuyer credit and purchase a home this year before Dec. 1 have a special option available for claiming the tax credit either on their 2008 tax returns due April 15 or on their 2009 tax returns next year.

 Qualifying taxpayers who buy a home this year before Dec. 1 can get up to $8,000, or $4,000 for married filing separately.

 “For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit, “ said IRS Commissioner Doug Shulman. “This important change gives qualifying homebuyers cash they do not have to pay back.”

 The IRS has posted a revised version of Form 5405, First-Time Homebuyer Credit on IRS.gov. The revised form incorporates provisions from the American Recovery and Reinvestment Act of 2009. The instructions to the revised Form 5405 provide additional information on who can and cannot claim the credit, income limitations, and repayment of the credit.

 This year, qualifying taxpayers who buy a home before Dec. 1, 2009, can claim the credit on either their 2008 or 2009 tax returns. They do not have to repay the credit, provided the home remains their main home for 36 months after the purchase date. They can claim 10 percent of the purchase price up to $8,000, or $4,000 for married individuals filing separately.

 The amount of the credit begins to phase out for taxpayers whose adjusted gross income is more than $75,000, $150,000 for joint filers.

 For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase.

 The IRS also alerted taxpayers that the new law does not affect people who purchased a home after April 8, 2008, and on or before December 31, 2008. For these taxpayers who are claiming the credit on their 2008 tax returns, the maximum credit remains 10 percent of the purchase price, up to $7,500, or $3,750 for married individuals filing separately. In addition, the credit for these 2008 purchases must be repaid in 15 equal installments over 15 years, beginning with the 2010 tax year.