Industry NewsMortgage

FHA premiums to be based on risk

Pricing plan coincides with FHA expansion
Published on May 9, 2008

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by CareyBot

The Bush administration proposes to implement "risk-based" pricing of premiums paid by borrowers with government-backed loans beginning July 14 -- the same day guidelines for FHA loan guarantee programs are to be expanded to serve more delinquent borrowers.

The more flexible pricing structure, which would also allow FHA to reduce mortgage insurance premiums for some borrowers with good credit, is intended to enable the government to serve more troubled borrowers while protecting taxpayers from losses, HUD officials said.