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The Fulton Research Blog

FHA is Increasing Cost of Borrowing

The Federal Housing Administration, or FHA, is attemtpoing to improve their financial position by raising rates for borrowers.  As CNBC’s Diana Olick reports on her Realty Check blog, the FHA is now raising the rates for upfront mortgage insurance premium paid by borrowers from 1.75 to 2.25 percent. 

The FHA and The Fed are keeping the housing industry afloat by buying mortgages, although both offer shaky footing.  This story will unfold in the coming months as the housing market plans for a life after the stimulus package.   Will the FHA be able to sustain its current volume?  Will The Fed extend their program of purchasing mortgages?  The answers to these questions will shape the housing market recovery in 2010.

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