January 7, 2015 / 7:21 PM / 4 years ago

White House says FHA to cut mortgage insurance premiums

U.S. President Barack Obama answers a question after his end of the year press conference in the briefing room of the White House in Washington, December 19, 2014. REUTERS/Larry Downing

WASHINGTON (Reuters) - The Federal Housing Administration will reduce annual mortgage insurance premiums by 0.5 percentage point to 0.85 percent from 1.35 percent, the White House said on Wednesday.

In a statement, the White House said the move was part of President Barack Obama’s efforts “to expand responsible lending to creditworthy borrowers.”

The FHA insures about one-fifth of all new U.S. mortgages and is a major provider of mortgages to first-time homebuyers.

The administration also would be taking additional steps over the coming months to “cut red tape and clarify lending standards” to make mortgages more affordable and accessible to credit-worthy families, the White House said.

With an FHA-backed loan, buyers can put down as little as 3.5 percent of the purchase price.

Reporting by Lyndsay Dunsmuir; Editing by Andrea Ricci

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