(Adds Schumer comment, closing share prices, background)

By Sarah N. Lynch

WASHINGTON, Jan 20 (Reuters) - The Trump administration, hours after taking office on Friday, suspended a plan to cut mortgage insurance premiums on federally insured home loans that the U.S. government had estimated would save eligible homeowners an average of $500 a year.

The move immediately drew fire from Democrats, and it offered an early example of the potential conflicts ahead as Republican President Donald Trump rolls back measures put in place by his Democratic predecessor, Barack Obama.

"In one of his first acts as president, President Trump made it harder for Americans to afford a mortgage," U.S. Senate Minority Leader Chuck Schumer said in a statement.

"Actions speak louder than words," Schumer said. "One hour after talking about helping working people and ending the cabal in Washington that hurts people, he signs a regulation that makes it more expensive for new homeowners to buy mortgages."

Trump officials did not reply to emailed questions.

The reduction in Federal Housing Administration (FHA)mortgage insurance premiums was announced just last week by the Obama administration and had been due to take effect on Jan. 27.

The reduction "has been suspended indefinitely," pending further research, the Department of Housing and Urban Development (HUD) said in a letter to participants in FHA loan programs. The letter was signed by Deputy Assistant Secretary for Housing Genger Charles.

When asked for more information, a HUD spokesman referred back to the letter, which said that "more analysis and research are deemed necessary."

Obama's HUD Secretary Julian Castro said on Jan. 9 that the premiums would be cut to share with U.S. homeowners recent gains in FHA's Mutual Mortgage Insurance Fund, which has recovered from the financial crisis almost a decade ago.

FHA, part of HUD, offers mortgage insurance, often to first-time home buyers and those on low incomes. The insurance protects lenders in case of defaults. HUD said cutting the premiums would help about 1 million households.

HUD's decision to lower the premiums by a quarter-percentage point earlier this month divided lawmakers, with Republicans accusing the Obama administration of putting taxpayers at risk of a potential bailout of the FHA.

"Just three years ago the taxpayers had to spend $1.7 billion to bail out the FHA," House of Representatives Financial Services Committee Chairman Jeb Hensarling said on Jan. 9 when the premium cut was announced.

"Playing politics with the FHA through cynical, surprise 11th hour rule changes is irresponsible," Hensarling said.

HUD had projected that the reduced premiums would have saved FHA-insured homeowners an average of $500 in 2017.

Ben Carson, Trump's nominee to head HUD, told Congress last week during a hearing on his nomination that the incoming administration planned to examine the decision closely.

Shares of mortgage insurers MGIC and Radian closed up less than 1 percent on the New York Stock Exchange.

(Additional reporting by Daniel Burns in New York and Richard Cowan in Washington; Editing by Kevin Drawbaugh and Daniel Wallis)