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The Federal Housing Administration on Thursday announced a multifamily insurance rate reduction which it estimates will benefit as many as 40,000 families over the next three years.

The FHA also estimated the cuts would facilitate the rehabilitation of 12,000 additional affordable housing units per year.

As a result of the cuts:

• "broadly affordable" properties' annual insurance rates will be lowered to 25 basis points, a reduction of 20 or 25 basis points;
• affordable mixed-income properties' rates will be lowered to 35 basis points, a reduction of 10 to 35 basis points;
• qualified energy-efficient properties' rates will be lowered to 25 basis points, a reduction of 20 to 45 basis points.

Market-rate multi-family properties that are not energy-efficient will have unchanged rates. The FHA will also limit the fees allowed to be charged on loans for qualified broadly affordable and energy-efficient properties.

Earlier this month, NAFCU Chief Economist and Director of Research Curt Long said an additional FHA premium cut would "bolster" the housing market, in an interview with American Banker.

"The housing market is still struggling as many Americans, particularly first-time buyers, simply cannot afford the cost of home ownership," Long was reported saying. "Cutting FHA premiums bolsters the housing market and would be welcomed by credit unions as they continue to serve their 102 million member-owners."

Last year, the Department of Housing and Urban Development cut the FHA's annual premium by half a percentage point. NAFCU strongly supported the move, as it helped make mortgages more affordable to more consumers and further advanced the housing recovery.