HUD published detailed changes to the FHA Single Family Annual Mortgage Insurance Premium (Annual MIP) and Up-Front Mortgage Insurance Premium (UFMIP) in Mortgagee Letter 2012-04.
The Temporary Payroll Tax Cut Continuation Act of 2011 requires FHA to increase the Annual MIP it collects by 0.10 percent. This change is effective for case numbers assigned on or after April 9, 2012. FHA is also exercising its pre-existing statutory authority to add an additional 0.25 percent to mortgages exceeding $625,500. This change is effective for case numbers assigned on or after June 11, 2012.
The UFMIP will be increased from 1 percent to 1.75 percent of the base loan amount. This increase applies regardless of the amortization term or LTV ratio. FHA will continue to permit financing of this charge into the mortgage. This change is effective for case numbers assigned on or after April 9, 2012.
These FHA premium increases are part of ongoing efforts to encourage the return of private capital in the residential mortgage market and strengthen the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund.
In addition, effective for all FHA Single Family Forward Streamline Refinance transactions that are refinancing FHA loans endorsed on or before May 31, 2009, the Annual MIP will be 0.55 percent, regardless of the base loan amount; and the UFMIP will decrease from 1 percent to 0.01 percent of the base loan amount. The endorsement date can be found on the Case Query screen in FHA Connection. These changes are effective for case numbers assigned on or after June 11, 2012.
FHA mortgages with amortization terms of 15 years or less, and a loan-to-value (LTV) ratio of 78 percent or less remain exempt from the Annual MIP (see Mortgagee Letter 2011-35).
ConformX Annual MIP and UFMIP data integrity checks will be modified effective March 17, 2012, to support these upcoming FHA premium rate structures. Â A new field has been created to capture the Existing FHA Loan Endorsement Date for FHA Streamline Refinances with case numbers assigned on or after June 11, 2012.
Mortgagee Letter 2012-04 can be viewed at: http://portal.hud.gov/hudportal/documents/huddoc?id=12-04ml.pdf
Summary of New FHA Premiums
FHA loans with Case Number Assignment Dates on or after April 9, 2012 will have an UFMIP of 1.75 percent.
The new Annual MIP rates are detailed in the following premium charts from ML 12-4:
| Term > 15 Years |
|---|
| Base Loan Amount | LTV | Effective | Annual MIP |
|---|---|---|---|
| Any Amount | ≤ 95.00% | April 9, 2012 | 120 bps |
| Any Amount | > 95.00% | April 9, 2012 | 125 bps |
| Term ≤ 15 Years with LTV above 78% |
|---|
| Any Amount | ≤ 90.00% | April 9, 2012 | 35 bps |
| Any Amount | > 90.00% | April 9, 2012 | 60 bps |
| Term > 15 Years |
|---|
| Base Loan Amount | LTV | Effective | Annual MIP |
|---|---|---|---|
| ≤ $625,500 | ≤ 95.00% | June 11, 2012 | 120 bps |
| ≤ $625,500 | > 95.00% | June 11, 2012 | 125 bps |
| Above $625,500 | ≤ 95.00% | June 11, 2012 | 145 bps |
| Above $625,500 | > 95.00% | June 11, 2012 | 150 bps |
| Term ≤ 15 Years with LTV above 78% |
|---|
| ≤ $625,500 | ≤ 90.00% | June 11, 2012 | 35 bps |
| ≤ $625,500 | > 90.00% | June 11, 2012 | 60 bps |
| Above $625,500 | ≤ 90.00% | June 11, 2012 | 60 bps |
| Above $625,500 | > 90.00% | June 11, 2012 | 85 bps |
For all FHA Streamline Refinance transactions that are refinancing FHA loans endorsed on or before May 31, 2009, the Annual MIP will be 55 bps and the UFMIP will be 0.01 percent effective for case numbers assigned on or after June 11, 2012, regardless of base loan amount.