After raising them six times during the housing bust, the Obama administration is reversing course and rolling back mortgage insurance premiums charged by the Federal Housing Administration by enough to save homeowners an average of $900 a year.

In a move expected to bring 250,000 first-time homebuyers into the market, FHA will reduce annual premiums by half a percentage point, to 0.85 percent. That will make homeownership more affordable for more than 2 million homeowners in the next three years, Secretary of Housing Julian Castro said in a statement.

FHA’s upfront premiums of 1.75 percent will remain unchanged. So a first-time homebuyers taking out a $180,000 mortgage will pay $3,150 upfront and $1,530 a year in premiums for access to FHA mortgage programs that let them purchase a home with as little as 3.5 percent down. Today, the same homeowner pays $2,430 a year in annual premiums.

President Barack Obama is expected to discuss the premium cuts tomorrow during a visit to Phoenix — one of the markets hit hardest by the housing boom and bust — Bloomberg reports.

The Obama administration raised FHA premiums during the housing bust not only to shore up capital reserves — which were hit hard by loan defaults — but to give back some of the market share taken away from private mortgage insurers, who insure mortgages guaranteed by Fannie Mae and Freddie Mac when borrowers put less than 20 percent down.

Last month, Fannie and Freddie’s federal regulator said the mortgage giants are ready to boost purchases and guarantees of mortgages where borrowers put just 3 percent down.

Although premium increases and tighter underwriting standards have helped FHA bolster its insurance fund’s capital position by more than $23 billion, premium reductions were seen as unlikely. That’s because it will probably be 2016 before a 2 percent cash cushion mandated by Congress is restored.

In an analysis published this week, researchers at the Urban Institute calculated that if FHA lowered annual premiums to 0.9 percent — a hair above where they’re actually going — it would still make as much as $3.1 billion on loans it insures this year.

The National Association of Realtors claims that FHA premium increases priced nearly 400,000 borrowers out of the housing market in 2013, and 234,000 in 2014. In the past four years, NAR said, the share of first-time buyers using FHA-backed loans shrank from 56 percent to 39 percent.

NAR President Chris Polychron — who will meet President Obama tomorrow — is hopeful the premium rollback will provide greater access to homeownership entry-level and underrepresented buyers.

“I look forward to attending the speech and sharing our views with President Obama,” Polychron said.

Editor’s note: This story has been updated to correct that the minimum down payment requirement for FHA-backed mortgages is 3.5 percent, not 3 percent.

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