Home owners who have mortgages backed by the government may be able to refinance their mortgages at a lower interest rate as well as not have to bear the high refinance fees to do so, President Obama announced at a news conference Tuesday.

The Federal Housing Administration will cut its upfront fees for refinancing loans. The plan is expected to reduce mortgage payments for the average FHA borrower by about $1,000 a year for up to 3 million borrowers, the administration announced.

Eligible borrowers must have an fha mortgage that was issued before June 1, 2009.

“It’s like another tax cut in people’s pockets,” President Obama said at the news conference.

Lowering refinancing fees “should be broadly positive for housing and the economy by reducing foreclosures and freeing up income for consumers to spend on other goods and services,” analyst Jaret Seiberg with the Washington Research Group told CNNMoney about the administration’s move.

Also on Tuesday, President Obama announced aid to service members who are found to have been wrongfully foreclosed upon. He said that lenders and mortgage servicers will be required to review the case of all service members who were foreclosed upon since 2006. Any service member found to have been wrongfully foreclosed upon will be compensated — repaid the lost equity in the home plus interest, as well as a flat fee of $116,785.