CHARLOTTE, N.C. — Some potential home buyers are scrambling after finding out they aren't getting an upcoming discount on their mortgage insurance like they had planned.
The rate cut would not have impacted any existing loans, only loans that would have closed starting Jan. 27.
People looking to buy homes were looking forward to Friday, which is the day the Federal Housing Administration’s insurance rate was supposed to drop. Now mortgage lenders are notifying buyers that plans have changed. President Donald Trump suspended the pending FHA rate cut hours after taking office.
FHA loans require buyers to pay for insurance in case they default on their mortgages.
The government announced on Jan. 9 it would cut the rate by 0.25 percent, which would have saved homeowners an average of $500 a year. Now, it's on hold and companies are having to review files and notify buyers.
"We are going back to look at each file to see what we can do to help home buyers get the best deal available for them," Adam O'Daniel, communications director for Movement Mortgage, said.
The national director of the Neighborhood Assistance Corporation of America, Eric Exum, said his organization offers ways to help low-income buyers without FHA loans, but this would have been a critical step to help more families get affordable housing, especially in Charlotte where prices are rising.
"It's a real concern because low and moderate income people need the most help, not things taken away," Exum said.
He hopes the government takes another look at the program and says even existing homeowners should be concerned.
"Neighborhoods become more stable if you make it more affordable for owners who are more invested in our community," he said.
The government suspended the rate cut indefinitely, stating it needed to do more research before making changes.
In 2016, more than 29,000 FHA loans were taken out in North Carolina.
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