Shares of Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) fell more than 9% each following President Obama’s housing speech today, where he announced a small cut to FHA annual premiums and didn’t mention the GSEs at all (so much for “no news is good news” theory that got thrown around earlier this week). As Clea Benson at Bloomberg reported yesterday, President Obama announced a 0.5% cut in FHA annual premiums, enough to give a small boost to new homeowners but certainly not a game-changer.

The FHA premium reduction seen as an incremental move by analysts

President Obama estimates that the change could save a new homeowner as much as $900 per year saying that, “it could be a full month’s payment that they’re saving, and that could make all the difference for a family that is owning its first home. And over time, this is going to potentially have an impact over millions of families all across the country.  It should help further accelerate growth in the housing market and stabilizing prices.”

But even that fairly modest amount could be a best case scenario.

“This savings will pull some marginal borrowers into homeownership, but it isn’t enough, in our view, to assume single family housing demand increases above our current assumption of 15.0% single family starts growth in 2015,” writes Sterne Agee analyst Jay McCanless, who estimates that a family with a $100,000 mortgage would save $25 per month from the change.

McCanless also says that it’s not clear whether the President has the authority to make this change without going to Congress, which obviously would it much less likely that the drop in fees actually happens. Regardless, he continues to recommend investors look at builders further up market whose clients are better able to qualify for mortgages including WCI Communities, Ryland, and PulteGroup.

BTIG managing partner Mark Palmer reaches essentially the same conclusion, though he sees it as an incremental negative instead of a positive since he’s covering a different part of the market.

“While this announcement is disappointing… insofar as the lowering of FHA premiums signals that the U.S. government’s previously announced retreat from the mortgage insurance space has stalled, we believe the impact on the private mortgage insurers (PMIs) will be more psychological than real,” he writes.

Like McCanless, Palmer doesn’t see this as big enough news to change any of his recommendations (he like Essent Group Ltd. and GenWorth Financial Inc.) or his overall view of the market.

Policy change doesn’t affect Fannie Mae, Freddie Mac investors

As for Fannie Mae and Freddie Mac, they’ve rebounded in the time it took to type up this article, but are still down more than 5% for the day. Both stocks had been gaining momentum over the course of the week, though it’s hard to know what President Obama might have realistically said that would change the situation for GSE investors. For anyone long on Fannie Mae, today’s policy tweak wasn’t even an incremental shift because it has no bearing on the court cases that are most likely to determine whether they get a payout.

Fannie Mae, Freddie Mac Tank After President's Housing Speech