FHA Requirements: Mortgage Insurance

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:

*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).

FHA NEWS and RELATED ARTICLES