Ranking member of the House Financial Services Committee, Rep. Maxine Waters (D-Calif.), recently introduced the Making FHA More Affordable Act. The bill would repeal the Federal Housing Administration's life of loan requirement.
The bill would also reinstate the FHA’s previous policy that requires borrowers to pay their mortgage insurance premiums until the outstanding principal balance reaches 78 percent of the original home value. “Families who take out home loans through the Federal Housing Administration should not be unnecessarily burdened with mortgage insurance premiums for the life of the loan," Rep. Waters said in a statement, per HousingWire.
“Lifetime mortgage insurance requirements also encourage strong borrowers with substantial equity in their home to refinance into a conventional mortgage product. That represents a missed opportunity to further strengthen the FHA portfolio,” NAR president William Brown said.
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