Quantcast

The reduction of the FHA mortgage insurance premium was announced for most FHA loans closed on or after January 27, 2017. The incoming Trump Administration suspended the change with its first executive action.

FHA Mortgage Loan Rates

December 12, 2019
FHA Rates for December 12, 2019
Compare 30 Year Fixed Mortgages
Compare 15 Year Fixed Mortgages
Use our mortgage calculators
to see what you can afford!
Get started one
Get started two
Get started three
Get started four
FHA.com is a privately owned website, is not a government agency, and does not make loans.

Choose a Loan Type

then
get
your

Your Credit Score

Do you know what's on
your credit report?
Get Credit Score Button
Get Credit Score Button
FHA.com is a privately owned website, is not a government agency, and does not make loans.

Obama's MIP Reduction for 2017 Reversed by Incoming Trump Administration

FHA Homeowners Can Still Save an Average of $900 Annually From the 2015 Reduction. Further Estimated Reduction of $500 Suspended.

FHA Mortgage Insurance Premiums (MIP)
FHA Mortgage Insurance Premiums (MIP)

On January 9, 2017, the Federal Housing Administration operating under the Obama administration announced a further reduction in the FHA loan annual mortgage insurance premiums (MIP) for new loans. The change would affect most Title II FHA mortgage loans with a closing/disbursement date on or after January 27, 2017. Excluded were loans made for properties in the Hawaiian Homelands.

These new MIP rates would have reduced the annual premiums by a quarter of one percentage point, bringing them in line with what rates were prior to pre-housing crisis levels of 2008. This is referred to by many as the "collapse of the housing market." Homebuyers financing their homes with an FHA government-backed loan could have saved an additional $500 per year based on an average $200,000 mortgage with a term of at least 11 years.

Less than two weeks later in the first hour of Trump's presidency, the incoming administration suspended the rate reduction with its first executive action. The suspension of the 0.25 percentage point premium rate cut happened before the reduction had even taken effect.

Since FHA loans have a minimum down payment rate set as low as 3.5 percent, it is compulsory that borrowers pay the MIP. When someone purchases a home with an FHA mortgage, part of their mortgage payment includes a required annual mortgage insurance premium (MIP). The amount of the annual MIP is based on the loan-to-value ratio, base loan amount, and the term of the mortgage.

Loans backed by FHA are popular because the FICO score requirement of 580 is lower than what is required for conventional mortgages and the down payment can be as low as 3.5%. Buyers must still demonstrate their ability to qualify for a mortgage and pay it back on time.

See also: Current Mortgage Insurance Premium (MIP) Rates

SEE YOUR CREDIT SCORES   From All 3 Bureaus  

Do you know what's on your credit report?

Learn what your score means.


GET STARTED

FHA Loan Articles and Mortgage News

Construction Loans for 2020: Build a House on Your Own Land

December 6, 2019 - Is 2020 the year you have a house built on your own lot with a loan 3.5% down payment? If you are a qualified veteran, that down payment amount is 0% to build on your own land as long as the appraised value matches or is higher than the asking price.

Problems That Can Delay Your FHA Home Loan (Part Two)

December 4, 2019 - In a recent article we discussed issues that can delay the approval or closing date of your FHA home loan. Do you know what these potential problems are? In Part One we discussed how bankruptcy, foreclosure, and appraisal problems may affect your mortgage loan.

Problems That Can Delay Your FHA Home Loan (Part One)

December 3, 2019 - When applying for an FHA home loan, there are issues that can slow down the progress of your mortgage, whether you are applying for a mobile home loan or an FHA One-Time Close Construction Loan. Some may be preventable in the planning stages of your loan.

FHA Loans in 2020: Pay Attention to Your Debt-To-Income Ratio

December 2, 2019 - Your FHA loan options in 2020 include new purchase loans, reverse mortgages, cash-out FHA refinance loans, and the One-Time Close construction loan if you want a house built for you. But planning ahead is key and you will need to examine and work on the amount of debt you carry

Late Payments Hurt Your Chances for a Cash-Out Refinance

November 29, 2019 - If you are applying for a refinance loan that requires a credit check, make sure you have made all payments on time for your mortgage and all other financial obligations. You'll benefit greatly if this is true for a minimum of 12 months ahead of your loan application.