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

Lender Protection for FHA Insured Loans

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).

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 NEWS and RELATED ARTICLES
When applying for an FHA home loan, some lenders may ask for tax paperwork as part of the application process. Some borrowers may wonder if this is legal, or an acceptable practice for home loans in general.

FHA loan applicants should compare rates and terms with competing lenders to try to get the most favorable terms on the loan or refinance loan. Down payment rules for FHA loans require a minimum 3.5% down compared to up to 20% for conventional loans.

There are many typical questions about FHA loan closing costs. For example, some wonder if the closing costs can be viewed as part of the required FHA loan down payment. (That is not possible, the closing costs and down payment are two separate things.)

Some borrowers come to the FHA loan process with a long credit history, while other borrowers are just getting started. Is it possible for a borrower be turned down for an FHA loan because of a lack of credit history?

When the Department of Housing and Urban Development announced the FHA’s Back to Work program, it was very good news for any potential FHA loan applicant who may have experienced previous financial hardship as a result of the recession.

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