On the current Administration’s first day on the job, a new directive thudded onto the desks of the National Association of REALTORS® and every real estate licensee who is working with or is about to work with a FHA borrower. The Department of Housing and Urban Development (HUD) announced on January 20 that it was suspending indefinitely a FHA mortgage insurance rate cut that NAR had worked hard to obtain for the benefits of our REALTOR® members and real estate buyers across the U.S.
Barely a few weeks earlier – on January 9 – HUD announced the rate cut. NAR’s understanding was that “continuing strength in FHA’s reserve fund, the Mutual Mortgage Insurance Fund, warranted the move.” We are unsure what has changed in FHA’s fiscal solvency between January 9 and January 20 which led to this disappointing decision.
NAR President William E. Brown said in a statement that NAR fears many buyers will be left out of the market:
According to our estimates, roughly 750,000 to 850,000 homebuyers will face higher costs, and 30,000 to 40,000 new homebuyers will be left on the sidelines in 2017 without the cut. We’re disappointed in the decision but will continue making the case to reinstate the cut in the months ahead.