The Federal Housing Administration (FHA), the largest low-down payment mortgage insurer, announced Wednesday that it’s raising premiums by 0.1 percent, or 10 basis points, on the majority of the new mortgages it insures.

For example, a home buyer selecting a 30-year, fixed-rate mortgage and putting at least 5 percent down are going to pay a yearly 1.3 percent insurance premium of his or her outstanding balance; those who put less than 5 percent will pay a premium of 1.35 percent.

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Most residential real estate buyers will now be required to pay insurance premiums for the life of their loan, the agency said. A policy from 2001 allowed borrowers to cancel premium payments when their debt dipped below 78 percent of the principal balance. One exception will be for borrowers who put more than 10 percent down at the time of purchase.

Additional new policies include:

  • Manual underwriting required for applicants with less than 620 credit score and debt-to-income ratio above 43 percent
  • Lenders issuing loans to these applicants must adequately document reasons for approval
  • Retirees no longer permitted to take large upfront payments from reverse mortgages
  • Jumbo home loans — $625,000 or more — increasing by 5 basis points, or 0.05 percent
  • Minimum down payment for jumbo home loans rising

The FHA said these new changes are aimed at reducing its exposure to risky loans and bolster its financial reserves, which have been depleted due to high delinquency rates from the mortgage crisis. The agency has not said when the new rates will take effect.

Last spring, FHA increased both premiums and upfront costs on mortgages. Such hikes make it tougher for mortgage borrowers — especially first-time purchasers who can’t afford the large down payments most private lenders require today, according to Jaret Seiberg, a Washington policy analyst for Guggenheim Partners. “They are the ones most likely to turn to the FHA for credit,” he said.

And that could have a negative impact on the housing market overall. A healthy housing market can’t exist unless there is a constant influx of first-time homebuyers, Seiberg said.

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