Trump’s first real action on Friday was to steal $1,500+ a year from low and middle-income Americans by suspending the FHA mortgage insurance premium cut. This terrible decision makes buying and owning a home harder for 1 in 5 home buyers in America.
Basically, if you’re buying a new home but don’t make enough money to qualify for a traditional mortgage, you can ask the Federal Housing Administration (FHA) to guarantee your mortgage. Meaning, they will pay back the bank if you can no longer do so. And they will also allow you to put a 3.5% down payment, instead of the normal 20%.
But in exchange for making that guarantee, the FHA requires borrowers to pay the premiums on mortgage insurance.
Obama lowered the monthly insurance premium (MIP) by 0.25%, set to take effect at the end of January. But Trump suspended that cut.
So let’s say you’re buying a house in Hayward (CA) for $636,150, the mortgage limit for FHA loans. Previously, in the first year of being a homeowner, your MIP was $430.98. With the cut, it would become $304.22, a savings of $126.76 a month. Or $1,521.12 annually.
From day one, Trump has already financially hurt the very people who he courted votes from. This move makes homeownership even more inaccessible to those who could barely afford their home to begin with. Way to go, jerk!