Mortgage Insurance Cost Reduction

The Biden Administration announced (February 22) that it is reducing the premium rate of mortgage insurance on Federal Housing Administration (FHA)-insured home mortgages.

An FHA-insured home mortgage is one that is insured by the government and issued by a bank or other lender approved by the agency. FHA loans require a lower minimum down payment than many conventional loans, and applicants may have lower credit scores than is usually required. FHA mortgages were used for 7.5% of home sales during the third quarter of 2022.

A mortgage insurance premium is the monthly fee that homeowners with FHA-insured mortgages which borrowers pay on top of monthly principal and interest payments. Mortgage insurance provides some protection to lenders in situations where a buyer defaults.

The premium rate will be reduced by an annual rate of 0.30 percentage points, from 0.85% to 0.55% for most new borrowers. Average annual borrower savings is estimted to be $800 per year for 850,000 homebuyers and homeowners.

(posted: 2-22-23)

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Housing Benefits for Service Personnel & Family

The Department of Defense announced (September 23) measures to improve the economic conditions of military personnel and families, including housing.

DOD announced that it will institute automatic increases starting in October in the Basic Allowance for Housing (BAH) for active duty Service members in the 28 Military Housing Areas (MHAs) experiencing an average of more than 20 percent spike in rental housing costs this year above this year’s BAH rates.

The 28 MHAs are: Vandenberg AFB, CA; Twenty-Nine Palms MCB, CA; San Diego, CA; Dover AFB/ Rehoboth, DE; Patrick AFB, FL; Miami/Fort Lauderdale, FL; Orlando, FL; West Palm Beach, FL; Volusia County, FL; Fort Myers Beach, FL; Kings Bay/Brunswick, GA; Maui County, HI; Chicago, IL; Boston, MA; Cape Cod – Plymouth, MA; Martha’s Vineyard, MA; Brunswick, ME; Coastal Maine, ME; Fort Leonard Wood, MO; Helena, MT; Wilmington, NC; Northern New Jersey, NJ; Newport, RI; Providence, RI; Beaufort/Parris Island, SC; Knoxville, TN; Houston, TX; Quantico/Woodbridge, VA.

(updated: 9-23-22)

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Manufactured Housing Efficiency Rules

The Department of Energy issued (May 18, 2025) final new efficiency rules on new manufactured housing. Updated standards are controversial in that they could lead to higher cost to buy manufactured housing, a type of housing that directly serves moderate-income Americans. The Energy Department estimated that on average, the standards will save the mobile home residents about $475 per year in utility bills and eventually cut carbon emissions by 80 million metric tons, the equivalent to energy use of over 10 million homes in one year.

The challenge is the additional cost to a purchaser from adding insulation, better windows, and more efficient heating and cooling systems. The standards try to address cost concerns with a tiered approach to standards, with different standards for single- (i.e., less expensive) and multi-section (i.e., more expensive) manufactured homes.

Energy also says it is “supporting the establishment of credit-enhancement mechanisms,” such as loan-loss reserves (LLRs), to drive down the cost of financing for manufactured housing and increase access to affordable housing. LLRs are a credit enhancement approach used by State and local governments to provide partial risk coverage to lenders so that they are more willing to finance riskier housing projects.

(updated: 5-25-22)

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Housing Initiative

The Biden Administration announced (May 16, 2022) an initiative to address the U.S. housing supply and home prices. There are many elements to the plan, most of which are elements that either require action by the Congress that may, or may not, happen in the near future or which merely are in the process of being considered for future action.

There is, however, one key element of the plan that could help with housing supply in the relative near-term. Last November’s Infrastructure Act included new funding for competitive grant programs related to transportation and community development – nearly $6 billion worth. In considering grant awards, the Department of Transportation (DOT) says it will include language in guidelines that encourage “land use reform, density, rural main street revitalization, and transit-oriented development.” DOT will also issue updated program guidelines that increase financial support for Transportation Infrastructure Finance and Innovation Act (TIFIA) program projects that include residential development.

What this effectively means is that DOT will view projects that have housing elements, directly or indirectly, more favorably than those projects without housing, at least with respect to funding that is distributed on a competitive basis. This will not turn dollars into more housing that is driven by Federal government policy and funding this year, but potentially later next year and the near-years to come.

(updated: 5-16-22)

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Housing Funding Enhancements for FY 2022

Congress passed final FY 2022 funding legislation for the Federal Government (March 10, 2022) that includes significant new investments in low-income housing support such as a $1.6 billion, 6% increase in rental assistance; a $645 million, 8% increase for public housing; and a $1.3 billion increase to build 2,200 affordable housing units for the elderly and 1,800 units for persons with disabilities.

(updated: 3-15-22)

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Infrastructure Act - Weatherization Support

The Infrastructure Investment and Jobs Act included $3.5 billion above existing annual funding ($308 million for FY 2020) for the U.S. Department of Energy Weatherization program. The program helps low-income families to reduce energy consumption through measures such as improved insulation, space-heating equipment, energy-efficient windows, water heaters, and efficient air conditioners. 

(updated: 2-2-22)

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Affordable Housing Supply

The Biden Administration announced on September 1, 2021, a number of actions that it claims will help increase the US affordable housing supply. For the most part, the actions center around financing the investment and construction of both permanent (e.g., manufactured homes) and rental properties through favorable terms, tax incentives, and other measures available under existing law.

(updated: 2-2-22)

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