It should be the perfect moment for first-time buyers—the missing link in the housing recovery—to enter the market. Houses are selling, prices are rising, foreclosure rates are down, and interest rates have maintained historically low levels—yet they have not jumped in. With its recent moves, the Obama administration is trying to entice them.
On the heels of a new 3% down loan program outlined in December, President Obama announced this week that the Federal Housing Administration will cut mortgage insurance premiums on its loans. The FHA estimates that 250,000 first-time buyers will enter the market after the premium reductions.
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