A new FHA rule that took effect on June 3 will cushion the agency against a budget shortfall, but at the same time will saddle its mortgage borrowers with higher costs.
Going forward, new homebuyers now must pay the insurance premium on their FHA loan – which previously expired once 22 percent of the principal was paid – for a minimum of 11 years and possibly for as long as the life of the loan.
That could mean hundreds of extra dollars each month in payments for FHA borrowers, who typically have flawed credit and/or cannot contribute a large downpayment.
