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FHA requirements include mortgage insurance for FHA loans in 2020 to protect lenders against losses that result from defaults on home mortgages. Mortgage insurance premiums are required when down payments are less than 20% of the appraised value.

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FHA Requirements

Mortgage Insurance (MIP) for FHA Insured Loan

Mortgage insurance is a policy that protects lenders against losses that result from defaults on home mortgages. FHA requires both upfront and annual mortgage insurance for all borrowers, regardless of the amount of down payment.

2020 MIP Rates for FHA Loans Over 15 Years

If you take out a typical 30-year mortgage or anything greater than 15 years, your annual mortgage insurance premium will be as follows:

Base Loan Amount LTV Annual MIP
≤ $625,500 ≤ 95% 80 bps (0.80%)
≤ $625,500 > 95% 85 bps (0.85%)
>$625,500 ≤ 95% 100 bps (1.00%)
> $625,500 > 95% 105 bps (1.05%)

2020 MIP Rates for FHA Loans Up to 15 Years

Homebuyers who can afford to pay off their loans quicker and opt for a shorter term, such as a 15-year mortgage, will benefit from lower mortgage insurance premiums, as follows:

Base Loan Amount LTV Annual MIP
≤ $625,500 ≤ 90% 45 bps (0.45%)
≤ $625,500 > 90% 70 bps (0.70%)
> $625,500 ≤ 78% 45 bps (0.45%)
> $625,500 78.01% to 90% 70 bps (0.70%)
> $625,500 > 90% 95 bps (0.95%)

How Long Will You Pay the MIP?

For loans with FHA case numbers assigned on or after June 3, 2013, FHA will collect the annual MIP, which is the time at which you will pay for FHA Mortgage Insurance Premiums on your FHA loan. They are as follows:

Term LTV% Previous New
≤ 15 years ≤ 78% no annual MIP 11 years
≤ 15 years 78.01% to 90% cancelled at 78% LTV 11 years
≤ 15 years > 90% loan term loan term
> 15 years ≤ 78% 5 years 11 years
> 15 years 78.01% to 90% cancelled at 78% LTV and 5 years 11 years
> 15 years > 90% cancelled at 78% LTV and 5 years loan term

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.

*Revision to the Annual MIP Premium – as per Mortgagee Letter 2015-01

There will be no change in Annual Mortgage Insurance Premiums for all case numbers assigned on or after January 26th, 2015 for the following:

  1. On loans with a Loan to Value of less than or equal to 78% and with terms up to 15 years. The annual MIP for these loans will remain at 45 basis points.
  2. On terms ≤ 15 years and loan amounts ≤ $625,500 - If the loan to value is ≤ 90%, the Annual Premium remains the same at 45 basis points (bps). If the loan to value is >90%, the Annual Premium remains the same at 70 basis points (bps).
  3. On terms ≤ 15 years and loan amounts >$625,500 - If the loan to value is 78.01% - 90.00%, the Annual Premium remains the same at 70 basis points (bps). If the loan to value is >90%, the Annual Premium remains the same at 95 basis points (bps).

There will be the following reduction in premiums in Annual Mortgage Insurance Premiums for all case numbers assigned on or after January 26th, 2015 for the following:

  1. On terms > 15 years and loan amounts ≤ $625,500 - If the loan to value is ≤ 95%, the new Annual Premium is reduced from 130 basis points (bps) to 80 basis points (bps). If the loan to value is >95%, the new Annual Premium is reduced from 135 basis points (bps) to 85 basis points (bps).
  2. On terms > 15 years and loan amounts >$625,500 - If the loan to value is ≤ 95%, the new Annual Premium is reduced from 150 basis points (bps) to 100 basis points (bps). If the loan to value is >95%, the new Annual Premium is reduced from 155 basis points (bps) to 105 basis points (bps).

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