FHA Reduced Mortgage Insurance Premium


FHA Reducing Annual MI rates
as of January 26, 2015!FANTASTIC NEWS FOR CURRENT & FUTURE FHA MORTGAGE LOAN APPLICATONS

The FHA annual mortgage insurance premium is being
reduced from 1.35 percent to .85 percent. This action
reduces monthly mortgage payments!

Some good news coming out of Washington, DC on the homeownership front. The Federal Housing Administration (FHA) has announced a reduction to the annual mortgage insurance premiums for FHA backed mortgage loans. This is the first reduction after several increases that followed the housing bubble crash.

The reduction of the premium will apply to FHA loans with a tem greater than 15 years for all loan purposes. This does not include single family forward streamline refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009, as they already have a reduced premium. There has been no change announced to the upfront premium amount as of yet.

HUD has announced that the .50% annual MI premium reduction effective for case numbers assigned on or after January 26, 2015. To allow borrowers to utilize these reduced annual MIP rates for loans in process with active FHA Case numbers. FHA will temporarily approve cancellation request for active FHA Case Numbers within 30 days of the effective date of their first announcement January 9, 2015. HUD will be providing additional information on the procedure to handle this process.

 

 

COMMON QUESTIONS & ANSWERS

  • I have an FHA file closing before 1/26/2015. Does this file qualify for the decreased MIP?No. The reduced MIP is only available to files with FHA case #’s assigned as of 1/26/2015.
  • Are my current files in underwriting automatically approved for the reduced MIP?NO! Your lender needs to cancel the current FHA CASE number
  • Do I wait until January 26, 2015 to submit new application for  FHA loans and use the reduced annual MI premium?NO! Continue your application process and start the underwriting process. We will order the FHA Case # on or after January 26th

 

HUD MIP CHANGES CURRENT MIP

NEW MIP(Cases Assigned on or after 1/26/15)

                                         Term >15 Years
Loan Amounts <=$625,500
<=95% LTV 1.30% 0.80%
>95% LTV 1.35 0.85%
Loan Amounts > $625,500
<=95% LTV 1.50% 1.00%
>95% LTV 1.55% 1.05%
                                                   Term <= 15 Years
Loan Amounts <=$625,500
<=90% LTV 0.45% 0.45%
>90% LTV 0.70% 0.70%
Loan Amounts > $625,500
<=90% LTV 0.70% 0.70%
>90% LTV 0.95% 0.95%
     
Annual Premium Requirements – Streamline Refinances of Cases ENDORSED PRIOR TO 6/1/09
All Loans 0.55% 0.55%

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