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(Bloomberg) — Fannie Mae and Freddie Mac’s overseer wants to allow debt cuts for a narrow group of borrowers who owe more than their homes are worth. The trick is figuring out a way to do it without incurring costs for taxpayers.

Federal Housing Finance Agency Director Melvin L. Watt told reporters Wednesday that he is still studying the idea of reducing principal on properties with depressed values, a step backed by housing advocates and Democratic lawmakers.

Watt, a former Democratic congressman who has been in the FHFA job for just over a year, met with reporters for a broad discussion of his policies, which apply to the more than half of home loans backed by Fannie Mae and Freddie Mac.

If you saw the White House announcement of lower insurance payments on Federal Housing Administration home mortgages this month, you might have wondered: Does this matter to me as a potential homebuyer or refinancer? Who specifically will benefit from the decrease in fees?

The Obama administration estimates that by lowering FHA’s annual mortgage insurance premiums by half a percentage point, as many as 250,000 new buyers will be able to purchase a house.

That’s great news and overdue. FHA almost priced itself out of competition with giant investors Fannie Mae and Freddie Mac by raising its premiums several times in recent years. FHA made itself too expensive and its market share has plunged.

So who is best positioned to take advantage of the new, more consumer-friendly mortgage pricing? Here’s a quick overview.

Start with your FICO credit score. If you’ve got a score between 620 and 719 and you have a down payment of 5 percent or less, FHA is likely to become your first choice in terms of monthly payments. It will cost you less in principal, interest rate and mortgage insurance charges compared with what you’d pay for a “conventional” loan eligible for purchase by Fannie Mae or Freddie Mac with private mortgage insurance.

Consider this example using data provided by MGIC, one of the major private insurance underwriters.

Say you want to buy a $220,000 first home with a 5 percent down payment. You’ve got a slightly below average FICO score between 680 and 699. Before the premium reduction, your monthly payment using a 30-year FHA loan at current interest rates would have been $1,225.

The same conventional loan with private mortgage insurance would have cost you $1,168 a month — $57 less than FHA. After the premium reduction, the monthly payment on the FHA loan will drop to $1,138 — $30 cheaper than the conventional alternative.

read more at: http://www.utsandiego.com/news/2015/jan/18/tp-buyers-might-want-to-look-at-fha-again/

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Santa Rosa-based lender Ygrene is trying to expand its footprint in the San Diego-area market for green home-improvement loans, taking on three well-established providers.

Ygrene specializes in so-called PACE financing — short for property assessed clean energy — that is paid back through property tax assessments and can be passed on to the next property owner. Property-assessed loans can be spent on a host of energy- and water-conservation upgrades to homes and businesses.

Ygrene is up and running within Chula Vista, where it had 50 projects worth $4.5 million completed or under construction at the end of 2014, but hit a roadblock as it attempted to expand into other jurisdictions, explained Crystal Crawford, a former Del Mar council member and Ygrene’s regional director for Southern California.

She says Ygrene is the only PACE lender in the state offering 30 year solar loans to homeowners. The loan carries an interest rate of 8.49 percent. It also offers loans to businesses.

Ygrene’s interest rate on a five-year loan is 5.99 percent; a 20-year loan is 8.25 percent.

read more at: http://www.utsandiego.com/news/2015/jan/29/ygrene-property-assessed-loans/

Disclaimer: for information and entertainment purposes only