FHA requirements include mortgage insurance for FHA loans to protect lenders against losses that result from defaults on home mortgages.

FHA Loan Rates

January 27, 2015
FHA Rates for January 27, 2015
30 Year Fixed
3.25% Rate
3.29% APR
15 Year Fixed
2.75% Rate
3.0% APR
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FHA Requirements

Mortgage Insurance for FHA Insured Loan

Mortgage insurance is a policy that protects lenders against losses that result from defaults on home mortgages. FHA requirements include mortgage insurance primarily for borrowers making a down payment of less than 20 percent.

Current Up-Front Mortgage Insurance Premium

The UPMIP is currently at 1.75% of the base loan amount. This applies regardless of the amortization term or LTV ratio.

Current Up-Front MIP on Certain Streamline FHA Refinances

SF forward streamline refinance transactions that are refinancing FHA loans endorsed on or before May 31, 2009, the UFMIP is currently 0.01 percent of the base loan amount.

Current Annual MIP on Certain Streamline FHA Refinances

SF forward streamline refinance transactions that are refinancing FHA loans endorsed on or before May 31, 2009, the Annual MIP will be 55 bps, regardless of the base loan amount and takes effect on or after June 11th, 2012.

Most Recent Changes to FHA Mortgage Annual Mortgage Insurance

*Revision to the time period for Assessing Annual MIP
For loans with FHA case numbers assigned on or after June 3, 2013, FHA will collect the annual MIP as per the chart below:

Term
LTV %
Previous
New
< = 15 yrs
< = 78
No Annual MIP
11 years
< = 15 yrs
> 78 - 90.00
Cancelled at 78% LTV
11 years
< = 15 yrs
> 90.00
Cancelled at 78% LTV
Loan Term
> 15 yrs
< = 78
5 years
11 years
> 15 yrs
>= 78 - 90.00
Cancelled at 78% LTV & 5 yrs
11 years
> 15 yrs
> 90.00
Cancelled at 78% LTV & 5 yrs
Loan Term

*Revision to the Annual MIP Premium

Increase in Annual Mortgage Insurance Premiums will be effective for all case numbers dated on or after June 3, 2013 for loans with an Loan to Value of less than or equal to 78% and with terms up to 15 years. The new annual MIP for these loans will go from 0 basis points to 45 basis points.

The following has already been in effect for all case numbers dated on or after April 1st, 2013.

On terms > 15 years and loan amounts < = $625,500 - If the loan to value is < = 95%, the new Annual Premium is 130 basis points (bps). If the loan to value is >95%, the new Annual Premium is 135 basis points (bps).

On terms < = 15 years and loan amounts < = $625,500 - If the loan to value is < = 90%, the new Annual Premium is 45 basis points (bps). If the loan to value is >90%, the new Annual Premium is 70 basis points (bps).

Note: SF forward mortgages with amortization terms of 15 years or less, and a loan to value ratio of 78% or less, remain exempt from the Annual MIP (Mortgagee Letter 2011-35).

Increase to FHA Annual Mortgage Insurance Premium for loans over $625,000
FHA is also exercising its authority to add an additional 5 basis points to mortgages with base loan amounts exceeding $625,000.

On terms > 15 years and loan amounts >$625,500 - If the loan to value is < = 95%, the new Annual Premium is 150 basis points (bps). If the loan to value is >95%, the new Annual Premium is 155 basis points (bps).

On terms < = 15 years and loan amounts >$625,500 - If the loan to value is 78.01% - 90.00%, the new Annual Premium is 70 basis points (bps). If the loan to value is >90%, the new Annual Premium is 95 basis points (bps).

Term > 15 Years
Base Loan Amount
LTV
Effective
Annual MIP
< = $625,500
< = 95.00%
1-April-13
130 bps
< = $625,500
>95.00%
1-April-13
135 bps
Above $625,500
< = 95.00%
1-April-13
150 bps
Above $625,500
>95.00%
1-April-13
155 bps
Term < = 15 Years With LTV Above 78%
Base Loan Amount
LTV
Effective
Annual MIP
Any Loan Amount
< =78.00%
3-June-13
45 bps
< = $625,500
< =90.00%
1-April-13
45 bps
< = $625,500
>90.00%
1-April-13
70 bps
Above $625,500
< = 90.00%
1-April-13
70 bps
Above $625,500
>90.00%
1-April-13
95 bps

FHA Loan Articles

Read About Mortgage News, FHA Updates, and Guidelines
FHA Reduces Annual Mortgage Insurance Premiums

FHA made an announcement about cuts in the annual mortgage insurance premium (MIP) in a preliminary January 2015 announcment. The new FHA policy reduces the rate for most Title II forward mortgages with terms greater than 15 years.

FHA Mortgage Insurance Premiums Requirements

There are many types of questions about FHA mortgage insurance premium requirements, but since the FHA changed its MIP policies to extend MIP for the maximum duration permitted by law, we've seen more questions about those changes.

Private Mortgage Insurance Requirements

One common question we get involves Private Mortgage Insurance and the premiums for that insurance. Borrowers should discuss PMI policy changes with a loan officer.

FICO Scores and FHA Lender Requirements

The FHA has a section in its rulebook that lists a minimum FICO score for borrowers. In general, if your FICO score is below 580, you won't qualify for the lowest down payment amount of 3.5%. This minimum may be lower than the standards set by lenders.

Minimum Property Requirements for Septic Systems

Lenders are responsible for making sure a property lives up to local requirements, community sewage systems are properly licensed, and these systems are adequate enough to service the property.