Please read the attached FHA Mortgagee Letter 2013-04 for specific MIP factor information and implementation.
A short summary is listed below.
FHA has announced three important changes to FHA Annual MIP (paid monthly). The effective dates are listed below.
1) (April 1, 2013) Annual MIP for all FHA loans will increase except streamline transactions that are refinancing loans endorsed by FHA on or before May 31, 2009 (ML 2012-4)
2) (June 3, 2013) Annual MIP will be required on all FHA loans for a minimum 11 years up to full loan term (e.g., 30 years) regardless of “mortgage pay down below 78%”. If the loan is less than or equal to 90% LTV at time of origination MIP term = 11 years. If the loan is > 90% LTV at time of origination the Annual MIP will last for the duration of the loan term = 30 years (!!WOW!!)
3) (June 3, 2013) Loans ≤ 15 years and ≤ 78% LTV will no longer be exempt from Annual MIP.
The effective dates of these items are for loans with FHA Case Numbers assigned on or after the dates listed above.
The MIP tables attached to Impac’s FHA program matrices will be updated to include these changes as soon as possible.
There are no changes to FHA Up Front Mortgage Insurance Premiums (UFMIP) at this time.
!!Wow!!–MIP to stay with you for the duration of the loan term. Wow… I doubt they increase revenue by doing this, all they will do is drive people away from using FHA loans when the market is stabilizing and they should be looking to add volume to their portfolio. They should have raised premiums when the market was most volatile.
knock 5% off entry level home prices with this guideline change.
Thanks lawmakers, brilliant way of creating jobs and getting money to circulate throughout the economy…