A quarter of a million Americans who have been shut out of the housing recovery may be able to get a mortgage now that President Barack Obama has cut the cost to insure their loans, Bloomberg reported.

Obama’s plan should spur homeownership for borrowers with lower credit scores by reducing the premiums they pay on Federal Housing Administration mortgages, said Brian Chappelle, a partner at consulting firm Potomac Partners LLC and a former FHA official.

The Standard & Poor’s Supercomposite Homebuilding Index rose 4.1 percent on the expectation of more sales of starter homes.

“It lowers the cost of homeownership, which translates into more borrowers being able to qualify,” Chappelle said. “It’s going to give a shot in the arm to the industry.”

First-time buyers are struggling to get mortgages in a time of tight credit and slow wage growth, which is slowing the housing rebound. They also haven’t had as much access to FHA loans, which are meant for lower-income borrowers, after the agency raised premiums to offset losses caused by defaults during the housing crash starting in 2008.

The Obama plan will will reduce the annual FHA fees to 0.85 percent of the loan balance from 1.35 percent at the end of the month. The typical first-time homebuyer will save about $900 in their annual mortgage payment, according to the FHA.