President Barack Obama, in front of a crowd of Valley residents on Thursday morning, announced plans to reduce Federal Housing Administration mortgage insurance premiums to make homeownership more accessible, and assist responsible buyers.
“We’re going to start this week laying out some of the agenda for the next year,” Obama told the audience packed into Phoenix’s Central High School’s gymnasium, located near Campbell and Central avenues. “And here in Phoenix I want to talk about helping more families afford their piece of the American Dream, and that is owning their own home.”
Obama said the FHA will reduce yearly mortgage premiums from 1.35 percent to 0.85 percent. This reduction will save the average first-time buyer $900 yearly in their mortgage payment, according to a statement from the White House.
“That’s $900 that can go toward paying the groceries, or gas, or a child’s education,” Obama said.
Obama described the economy as making a comeback, a remark echoed by Secretary of Housing and Urban Development Julian Castro, who said the economy is “like the Phoenix weather: hot.” But the president still emphasized to the crowd that the benefits of the reduction hinged on responsibility.
“I want to be clear, if you’re looking to take advantage of these lower rates, that’s great,” Obama said. “On the other hand, don’t buy something you can’t afford. You’re going to be out of luck. These rates are for responsible buyers.”
The reduced premiums will help up to 250,000 new buyers purchase a home during the next three years while assisting more than 800,000 homeowners save on the cost of their monthly mortgage, according to the White House.
The president joked that he and first lady Michelle Obama live in rental housing with a lease that was up in two years, before recalling the day the couple purchased their first home.
“I’ll never forget the day we bought our first place, a place of our own, a condo back in Chicago,” Obama said. “And for us, and millions of Americans like us, buying a home has always been about more than owning a roof and four walls. It’s about investing in savings, and building a family and planting roots in a community.”
Audience member and Phoenix resident Cheri Fowler said Obama’s speech hit close to home. Fowler’s husband lost three jobs between 2008 and 2010 and the couple was forced to short sell a home they were renting out because they could not keep up with paying two mortgages.
“We had to short sell a rental house, which was the house that we had first bought, but actually was meant for my kids’ college education fund,” Fowler said. “And when we had to short sell that house, there went the college money. So it was disastrous. It was a disastrous, frightening, actually terrifying time for us.”
District 8 Councilwoman Kate Gallego, who chairs Phoenix’s Neighborhoods, Housing & Development Subcommittee, said it was exciting to see Obama acknowledge how far Phoenix has come since the housing crisis, but still plan for the road ahead.
“It was exciting to have him celebrate how far we’ve come, but there are still people who need a safe home,” Gallego said.
Also present at Obama’s announcement was Phoenix Mayor Greg Stanton, who spoke about Phoenix’s rebounding economy and about the city’s accomplishments in ending chronic homelessness for veterans.
Contact the reporter at pkunthar@asu.edu
