Effective January 26th, all new FHA loans will have a lower mortgage insurance premium. The reduction will save you $104/mo on a $250,000 loan amount.
In Arlington County for 2014, only 3.1% of ALL properties sold last year were purchased using an FHA loan. Last year, FHA raised premiums to an amount that made it cost prohibitive to use one for a purchase. The most appealing thing about the loan is that it only required a 3.5% down payment (and still does), but when you compare that to a Conventional loan under $425,000 you could do as little as 5% down. For most people, it made no sense to pay the high premiums of an FHA loan where mortgage insurance NEVER goes away (Conventional Financing you can prepay the mortgage insurance as part of your closing costs or pay them monthly until your loan is 80% of the current value of the property and then the mortgage insurance is goes away).
With the reduction in premiums, FHA now is a better option for people with little cash to put down or those with poor credit scores.
For a more detailed history on the FHA loan and their rates, read the Mortgage Reports.