Why Obama Says Buying Your First Home Just Got More Affordable

— -- PHOENIX - A new White House initiative could put hundreds of dollars back into the pockets of homeowners with mortgages through the Federal Housing Authority, President Obama says.

Obama has directed the FHA to reduce the fees attached to government loans for home buyers by half a percent, from 1.35 to 0.85 percent. It may seem like a paltry figure, but the White House estimates the lowered premium will put $900 back into the pockets of the average borrower, annually.

"Buying a home has always been about more than buying a roof and four walls," Obama told a packed gymnasium at Phoenix Central High School today.

It's about "that sense of accomplishment that you were building something, for your family and your future."

The president came to this city as the second leg of a State of the Union preview tour, with this stop focusing on the housing market through a mortgage announcement the administration hopes will add a needed boost to new home sales.

The administration says it will also push 250,000 homes into the hands of those who may not be able to afford it otherwise.

In all, Obama expects the move will affect 800,000 homeowners across the United States. The FHA is a popular lender for new buyers and those annual fees are tacked on to each month’s mortgage bill. But they have jumped significantly in the past five years, being a low 0.55 percent in 2010.

An administration outline says the president will push to cut “red tape” between lenders and borrowers, and work to preserve “sound underwriting standards” to assure homeowners receive loans they can fully pay.

In his speech, the president touted the Consumer Financial Protection Bureau’s elimination of the “worst practices" of the past.

"Right now, Michelle and I live in rental housing. We don’t own where we live; we’ve got two years remaining on our lease. I’m hoping I get my security deposit back," Obama quipped. "Although Bo and Sunny have been tearing things up occasionally."

Before arriving at the high school, the president and Housing and Urban Development Secretary Julian Castro visited a single-family housing complex owned by a local nonprofit, Chicanos Por La Causa. The subdivision has received nearly $2 million since 2010 in federal grants related to the Recovery Act.

Prior to the group’s involvement, the neighborhood held 25 vacant and overgrown lots, according to a White House statement. The lot aims to sell homes to families that make $40,000 to $60,000 a year.

The Phoenix suburbs were emblematic of the 2008 housing bubble. For example, the nearby city of Maricopa, with its tiny population of 1,000 at the turn of the millennium, saw a boom to over 33,000 residents by the burst.

Then, suddenly, one in 10 homes was empty again. Dwellings that hadn’t yet lost their “new home smell” were void of life.

Since the recovery, the city’s population growth has leveled out, sitting at 45,000 today.

Obama came to the American southwest after a stop in Detroit Wednesday to tout the recovered auto industry. He will conclude Friday in Knoxville, Tennessee, to speak on job skills and education. The decision to give these State of the Union spoilers is an unusual one.

Typically, presidents keep the major points of the address under wraps until the night of the annual speech, then tour to promote them afterwards.

The president also briefly met before his speech today with retired congresswoman Gabrielle Giffords and her husband, astronaut Mark Kelly. This is the fourth anniversary of the Tucson shooting spree in which Giffords and 18 others were shot, six fatally. Giffords’ husband and his brother, Scott Kelly, are also preparing for a one-year study of twins in space.