MBA, Black Homeownership Collaborative Urge HUD to Reduce FHA Mortgage Insurance Premiums

The Mortgage Bankers Association and several trade associations representing the Black Homeownership Collaborative sent a letter to HUD Secretary Marcia Fudge last week urging the Department to make meaningful reductions to the annual Mortgage Insurance Premium and suspend life-of-loan requirements for borrowers with FHA-insured loans.

“Lowering the annual MIP would help reduce the cost of buying a home with an FHA mortgage, and ending the life of loan requirement would contribute to building wealth through homeownership in the Black community,” the letter said.

The letter noted since the start of the pandemic, the cost of buying a home has skyrocketed as home prices continue to rise and interest rates have doubled. “Less than three years ago, a salary of $64,400 per year was sufficient to purchase the median-priced home of $329,000 with a 3.31% interest rate,” the letter said. “Today, between much higher home prices and double the interest rate on a 30-year fixed-rate loan, a salary of more than $120,000 is necessary to purchase that very same home.”

The Black Homeownership Collaborative is a coalition of organizations dedicated to creating three million net new Black homeowners by 2030. Its members include the NAACP; National Association of Real Estate Brokers; National Association of Realtors; National Fair Housing Alliance; National Housing Conference; and the National Urban League.

“The opportunity for homeownership is an opportunity to build sustainable and thriving communities for working-class families,” the letter said.