FHA reduction in Mortgage Insurance essentially goes into effect on Monday, January 12, 2015! The Annual FHA mortgage insurance premium rate for a 30 year mortgage will be going down by 0.50 basis points. This reduction will lower payments by over $40 per month for a $100,000 FHA mortgage, and over $80 on a $200,000 FHA mortgage. This new rate goes into effect officially for FHA case numbers assigned as of January 26th, 2015. However, FHA will temporarily approve Case Number Cancellation Requests for loans with FHA Case Numbers assigned but not yet closed, to allow mortgagees to obtain the reduced annual MIP rates. To see the memorandum from HUD and facts of the FHA mortgage, continue reading.
NEWS AND UPDATES
TO: All FHA – Approved Mortgages
FHA Reduces Single Family Annual Mortgage Insurance Premium (MIP) Rates for Most Title II Forward Mortgages
Today, the Federal Housing Administration (FHA) published Mortgagee Letter 2015-01, Reduction of FHA Annual MIP Rates and Temporary Case Cancellation Authority. This Mortgagee Letter implements the 50 basis point (0.50%) reduction in FHA’s annual Mortgage Insurance Premium (annual MIP) rates for most Single Family Title II forward mortgages announced by the President of the United States on January 8, 2015. This rate reduction furthers the Administration’s and FHA’s ongoing goal to prudently expand access to mortgage credit for individuals and families across a range of incomes.
The annual MIP rate reduction is effective for FHA Case Numbers assigned on and after January 26, 2015 for most Title II forward mortgages with amortization terms greater than 15 years. Today’s Mortgagee Letter includes a table which shows the current and new annual MIP rates by amortization term, base loan amount, and loan-to-value ratio. The rate reductions have also been incorporated into FHA’s Mortgage Insurance Premiums table for forward mortgages. This updated Mortgage Insurance Premiums table will be integrated into FHA’s Single Family Housing Policy Handbook (HUD Handbook 4000.1) at the next available update.
Temporary Case Cancellation Authority
FHA will temporarily approve Case Number Cancellation Requests for loans with FHA Case Numbers assigned but not yet closed, to allow mortgagees to obtain the reduced annual MIP rates. Mortgagees must submit Case Number Cancellation Requests under this temporary authority using the submission instructions specific to this temporary authority posted today on FHA’s Case Processing Requirements web page.
Mortgagees may begin requesting Case Number cancellations on January 15, 2015, but must submit all Case Number Cancellation Requests under this temporary authority by 11:59 p.m., Eastern, on February 26, 2015. Mortgagees should not order new Case Numbers under this temporary authority until they have confirmed in FHA Connection that the previous Case Number has been cancelled. – Bob Hein