We’ve had many questions regarding upcoming FHA changes for mortgages regarding mortgage insurance. Below is an overview of these changes and the effect they will have regarding FHA Mortgage Insurance.
What are the changes to FHA Mortgages starting in June of 2013?
On June 3, 2013 the following FHA MIP changes will be in effect for FHA case numbers assigned for all transactions.
For all mortgages regardless of the amortization terms, any mortgage involving an original principal obligation of less than or equal to 90% LTV, the annual (monthly) MIP will be assessed through the end of the mortgage term or for the first 11 years of the mortgage term, whichever occurs first.
For any mortgage involving an original principal obligation with an LTV greater than 90%, FHA will assess the annual MIP through the end of the mortgage term.
FHA has removed the exemption from the annual (monthly) MIP for loans with terms of 15 years or less and LTVs of less than or equal to 78% at origination. The new annual MIP will be 45bps.
Below is a chart to see previous MI vs. New MI starting in June: