The U.S. Department of Housing and Urban Development announced that it has “suspended indefinitely” a planned cut in the annual mortgage insurance premium on home loans insured by the Federal Housing Administration. The FHA loans accounted for 12.1 percent of loans in the San Francisco metro area in the 12 months ending in September. This is considerably lower than the 24.4 precent in California, primarily because the maximum loan $636,150 in all Bay Area counties (except Solano and Sonoma, which are lower) and the median home price in the region was $695,000.
First-time home buyers often use FHA loans as they require lower down payments (as little as 3.5 percent) and lower credit scores (580 and above) as compared with Fannie Mae and Freddie Mac.
Analysts say home buyers in California would have saved an average of $860.00 a year.
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