Mortgage Insurance Freedom Act

HR 5508, the Mortgage Insurance Freedom Act, stops the government from collecting annual mortgage insurance premiums on FHA-insured mortgages once the remaining loan balance falls to 78% or less of the home's original purchase price or appraised value. It directly affects homeowners with FHA loans who reach this balance threshold, eliminating their annual insurance payments. The bill requires the Secretary of Housing and Urban Development to create a process for homeowners to prove their loan balance meets the 78% threshold and to conduct outreach about this change. An exception applies if the Mutual Mortgage Insurance Fund's capital ratio drops below 2%, temporarily keeping premiums in effect for certain mortgages. This applies only to mortgages endorsed for FHA insurance after the bill's enactment.