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

Washington

THE Obama administration cut mortgage-insurance premiums charged under a government programme 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 per cent of the loan balance.