The U.S. Federal Housing Administration will be reducing its annual insurance premiums in 2017, according to a release from the U.S. Department of Housing and Urban Development Monday.

Annual mortgage insurance premiums will decline by 25 basis points — from 0.85 percent of the mortgage value to 0.60 percent — on most new mortgages that close by Jan. 27. The decrease affects all Federal Housing Administration Title II mortgage programs except for specific exemptions around Hawaiian and Native American lands.. It will save borrowers an average of $500 and will be used by approximately 1 million Americans in 2017, according to the release.

The decrease to the administration’s premiums will bring the mortgage premium closer to the levels seen before the Great Recession, according to the release. The reduction reflects a fourth consecutive year of improved economic health for the administration’s Mutual Mortgage Insurance Fund, and is designed to alleviate the burden on consumers as mortgage interest rates increase.

—Bulletin Staff Report