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Financial Services Law Insights and Observations

FHA Price Cut Officially Halted by New Administration

Federal Issues Mortgages FHA Mortgagee Letters Trump

Federal Issues

On January 20, the newly-installed Trump Administration issued Mortgagee Letter 2017-07, which indefinitely suspended the reduction in Federal Housing Administration (FHA) premiums that had been scheduled to go into effect January 27 under a policy approved by outgoing HUD Secretary Julian Castro. In suspending the rate change, FHA explained that it remains “committed to ensuring its mortgage insurance programs [remain] viable and effective in the long term for all parties involved, especially our taxpayers,” and that, “more analysis and research are deemed necessary to assess future adjustments while also considering potential market conditions in an ever-changing global economy that could impact our efforts.” FHA also confirmed that it “will issue a subsequent Mortgagee Letter at a later date should this policy change.”

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