Trump suspends FHA mortgage insurance reduction program, Minnesota responds
(KMSP) - A decision by President Donald Trump could end up costing first-time home buyers hundreds of dollars. And for some, it could actually be the difference between owning a house, or not.
Among some of his first actions as president, Trump ordered a reversal on an Obama administration move to help low-income homebuyers.
For some, the small savings of $300-$400 over a year’s span could make a big difference in a lot of households.
Jamar Hardy of Edina Realty cautions that there are other options, and this could all be political gamesmanship.
“Maybe if this was something that was done six months ago, maybe it wouldn't be undone, but it kind of happened right towards the end,” he said.
On Jan. 9, the Department of Housing and Urban Development announced the quarter-point interest rate cut to FHA-backed loans to take effect Jan. 27 and said their financial reserves are healthy.
The move was immediately criticized by Republicans who called it "the Obama administration's parting gift to hardworking taxpayers," setting them up for another bailout, and pushed for it to be overturned.
The National Association of Realtors estimates 750-850,000 people would have seen a savings, and it could have been the difference for up to 40,000 buyers who wanted to get into a home.
"We're disappointed in the decision, but will continue to make the case to reinstate the cut in the months ahead," said the association president. “We need sellers to come to the market so these buyers have options.”
Hardy said there's a bigger issue, at least here.
“We continue to see a supply problem for first time home-buyers,” he said. “Especially as you get under $250,000, it gets sparse.”
Hardy said that when talking about FHA buyers, “that's usually where we're buying, and right now, there's not a lot of options for them.”