To determine the effectiveness of the cut in the price of annual mortgage insurance premiums (MIP) paid by borrowers with Federal Housing Administration (FHA)-insured mortgages, the U.S. Department of Housing and Urban Development (HUD) shared how many borrowers were assisted in the year after the move, as well as the average savings on their mortgage payments.

“One year ago today, we cut mortgage insurance premiums and helped thousands of homeowners save more of their hard-earned money,” former HUD Secretary Marcia Fudge said prior to her last day. “This has been one of the crowning achievements of my tenure. I’m proud to reflect on the ways this historic action has already made a real difference in the lives of FHA borrowers, including many first-time homebuyers and households of color.”

The reduction in the price of the annual MIP went into effect on March 20, 2023, as one of the “cornerstones” of the Biden-Harris administration’s efforts to improve accessibility and affordability of homeownership. Over the last year, more than 682,000 borrowers saved an average of $876 annually, resulting in almost $600 million collectively saved in the first years of these borrowers’ mortgages.

“At a time when homebuying has become more expensive and feels out of reach for many, the MIP cut puts money back into the pockets of American homebuyers and helps more well-qualified borrowers achieve the benefits of homeownership,” Federal Housing Commissioner Julia Gordon said. “Our ability to make such a significant premium reduction was based on a solidly performing Mutual Mortgage Insurance Fund in fiscal year 2022 and prudent risk assessment of our portfolio.”