The Department of Housing and Urban Development released its 2012 budget proposal yesterday.
HUD projects further declines in Federal Housing Administration originations, which fell 9-percent in 2010, and the agency proposes raising mortgage insurance premiums on 15 and 30-year FHA-backed loans by .25-percent to make up for the shortfall.
The premium change would affect new loans insured by FHA beginning on Apr. 18, 2011.
HUD estimates the change will contribute an additional $3 billion to the Mutual Mortgage Insurance fund, which currently has reserves of approximately $3.6 billion.
New FHA borrowers are projected to pay an average of $30 more per month.
Read the HUD press release here.
Further analysis can be found here.