FHA Annual Mortgage Insurance Premium (MIP) Rates Decline


January 24, 2015

Pursuant to its statutory mandate, FHA continuously strives to achieve the appropriate balance between meeting the housing needs of the borrowers FHA’s mortgage insurance programs were created to serve and minimizing the level of risk undertaken relative to the insurance of those mortgages. FHA has determined that the appropriate balance of its statutory perational
goals now requires a reduction of the rate of annual MIP charged pursuant to Section 203(c)(2)(B) of the National Housing Act (NHA). As provided in this Mortgagee Letter (ML), the total annual MIP charged pursuant to sections 203(c)(2)(B) and (C) for most Title II Single Family forward mortgages has been revised as provided in this Mortgagee Letter (2015-01).

This ML is effective for case numbers assigned on or after January 26, 2015.

This ML reduces the rate for annual MIP for all Title II forward mortgages, with terms greater than 15 years, except;  single family forward streamline refinance transactions that are
refinancing existing FHA loans that were endorsed on or before May 31, 2009;
? Section 247 mortgages (Hawaiian Homelands)
This ML supersedes the annual MIP rates established in ML 2013-4. All other sections of ML 2013-4 remain in effect.

The following table shows the existing and the new annual MIP rates by amortization term, base loan amount and Loan to Value (LTV) ratio. All New MIP amounts set forth in this table are effective for case numbers assigned on or after January 26, 2015.

                                                                     Term > 15 Years

Base Loan Amt.

LTV

Previous MIP

New MIP

≤ $625,500

≤ 95.00%

130 bps

80 bps

≤ $625,500

> 95.00%

135 bps

85 bps

> $625,500

≤ 95.00%

150 bps

100 bps

> $625,500

> 95.00%

155 bps

105 bps

                                                                        Term ≤ 15 Years

≤ $625,500

≤ 90.00%

45 bps

45 bps

≤ $625,500

> 90.00%

70 bps

70 bps

> $625,500

≤ 78.00%

45 bps

45 bps

> $625,500

78.01% - 90.00%

70 bps

70 bps

> $625,500

> 90.00%

95 bps

95 bps

 

To allow mortgagees to obtain the reduced annual MIP rates contained in this ML for loans in process with active FHA Case Numbers, FHA will temporarily approve cancelation requests for active FHA Case Numbers within 30 days of the effective date of this ML. FHA will provide operational details on case cancelations through FHA Info notifications and on FHA’s lender information page available at www.hud.gov/lenders.

Please address any questions about the topics addressed in this Mortgagee letter to the FHA Resource Center at 1-800-225-5342. Persons with hearing or speech impairments may reach this number via TTY by calling the Federal Information Relay Service at 1-800-877-8339. For additional information on this Mortgagee Letter, please visit www.hud.gov/answers.

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