Here’s how much Tri-Cities first-time buyers will benefit from FHA mortgage reform


An analysis by RealtyTrac shows the recently announced FHA reduction in annual mortgage insurances premiums will amount to savings to first-time buyers in the Tri-Cities, but not the $900 a year touted in the program’s announcement.

The reduction of 50 basic points, from 1.35% to 0.85%, is part of an effort to make mortgages more affordable to families or individuals who meet the standards.

RealtyTrac’s county-level report shows the annual savings in the Tri-Cities would range from $290 a year to $627.

Data used in the analysis included:

  • The 2014 estimated median house income for counties.
  • The average loan amount with a 3.5% down payment.
  • Average monthly payment before the reform.
  • Average monthly payment after the reform.
  • Home affordability before the reform (based on the percentage of income needed to buy).
  • Home affordability after the reform (based on the percentage of income needed to buy).

A benchmark of 28% or less of the median income to buy a median price home was used in the analysis.

After the numbers were crunched the analysis shows a percent saving and annual savings in dollars.

Here’s how the annual savings look for the Tri-Cities:

  • Sullivan – $497.
  • Washington – $627.
  • Greene – $386.
  • Carter – $456.
  • Hawkins – $410.
  • Unicoi – $297.
  • Johnson – $290.

The study also includes a  heat map that shows where buyers will save the most and what markets would be most affordable to those making the local median income.


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