In less than two hours after being sworn in, Donald Trump ordered the suspension of a U.S. Department of Housing and Urban Development(HUD) plan that would have cut premium rates for federally backed mortgages.
Genger Charles, Deputy Assistant Secretary for Housing, announced in a letter that the reduction in premiums that were going to take effect on January 27 would be “suspended indefinitely.”
The letter also stated that “more analysis and research are deemed necessary to assess future adjustments…”
The Federal Housing Administration(FHA), which is part of HUD, protects lenders from default by offering mortgage insurance to first-time homebuyers and those with low incomes.
This brought forth a partisan divide on Capitol Hill. Republicans accused the Obama administration of putting taxpayers at risk of a potential bailout of the FHA.
After the premium cuts were announced, House Financial Services Chairman Jeb Hensarling said, “Just three years ago the taxpayers had to spend $1.7 billion to bail out the FHA. Playing politics with the FHA through cynical, surprise 11th-hour rule changes is irresponsible.”
Homeowners were projected to have saved $500 this year, but that benefit is no longer available as the Trump administration did away with the plan. That means homeowners will be spending more money in the years to come.