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.
2017 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%) |
2017 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:
- 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.
- 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).
- 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:
- 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).
- 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).
FHA Loan Articles and Mortgage News
March 15, 2017 - Credit issues worry some FHA loan applicants. Not knowing how the lender will interpret some kinds of negative credit information causes a lot of anxiety for new borrowers. However, having a collection account on your record may not be an automatic barrier to getting an FHA mortgage.
February 10, 2017 - The Federal Housing Administration is lowering mortgage insurance premiums on FHA mortgage loans in 2017. When you purchase a home with an FHA mortgage, part of your mortgage payment includes a required annual mortgage insurance premium (MIP).
December 8, 2016 - Your FHA loan options in 2017 include new purchase loans, reverse mortgages, cash-out FHA refinance loans, and much more. Borrowers should take some time to review their last 12 months of credit and loan repayment history in preparation for the new loan.
October 31, 2016 - What does a borrower needs to know when preparing to apply for an FHA mortgage? There is a list of items to pay attention to that does include FICO scores; you may find that lenders are looking for FICO scores averaging between 620 and 640.
September 26, 2016 - Many borrowers want to know if the income coming from 401K accounts can be used as part of the debt to income calculation. What does the FHA loan rule book say about using a 401K to qualify? Are there cases where 401K income can be used in eligibility calculations?
