On loans that the down payment is less than 20% loan to value ratio, buyers pay mortgage insurance until the threshold is met. The FHA just recently reduced the amount of mortgage insurance from 1.35% to 0.85%. They have also reduced the amount of down payment necessary.


The question is how much these reductions will affect the affordability of the buyers and what effect it will have on the market.  Many buyers do not know about these reductions and perhaps if they do become aware of them they may decide to enter the real estate market.


As always, I am available to provide information and help with the process.