Trump Suspended FHA insurance?

Question

Link to News Source

So by suspending the mortgage insurance, he has effectively taken away the FHA loan since that's a major reason why lenders would accept a low down payment. Am I hopefully wrong in thinking this? Further implications of this?

Mark Shelstad · Answer

The program is like any other insurance product. If you undercharge for the risk assumed, eventually it will bite you. In this case, the insurance fund has been argued to be underfunded in the past, so reducing the premiums charged was the exact opposite thing a prudent person would do it they hope for long-term viability of the program. A failed program will cost taxpayers.

Bryan O. · Answer

@Mike Huang on top of that when I ran the numbers on my $400k unit, it would only have saved me $50/month. Basically not a change that would have much of an effect on anything either direction.

Mike Huang · Answer

That is good to hear, thanks for clarifying!

Christopher Phillips · Answer

@Mike Huang

he didn't suspend the MIP. He suspended the cost reduction in MIP that the HUD put forward a few weeks ago. They had a reduction to the MIP premiums in the past. This was to be a followup reduction in the premiums to adjust for rising interest rates.

So, it's just business as usual instead of a potential cost savings.