CNNMoney (New York) February 17, 2015: 8:28 AM ET
“It’s one of the things that’s inhibiting first-time homebuyers,” said Rob Chrane, president of Down Payment Resource. “There are a lot more people who can qualify for a home that don’t realize that they can.”
FHA cuts insurance costs
The Federal Housing Administration has long backed loans for borrowers with lower credit scores and with down payments as low as 3.5%, but until this year it also required hefty insurance payments.
FHA monthly insurance premiums dropped dramatically at the beginning of 2015. The change, from 1.35% to only 0.85%, will make FHA loans a better choice for some borrowers after years of prohibitively high premiums, said Anthony Hsieh, chief executive officer of loanDepot, one of the largest FHA lenders in the country.