FHA to cut fees, lowering rates for first-time home buyers

The Obama administration cut mortgage-insurance premiums charged under a government program that's popular with first-time home buyers with little money for a down payment, a move that may ease the burden of rising interest rates.

The annual fees the Federal Housing Administration charges to guarantee mortgages it backs are being cut by a quarter of a percentage point, the Department of Housing and Urban Development said in a statement on Monday. With the reduction, the annual cost for most borrowers will be 0.60 percent of the loan balance.

The change - which could be reversed after President-elect Donald Trump takes office - may hurt bond investors, as it speeds up repayment on some securities. Private insurers that compete Read more on Colorado Springs Gazette