Date: January 9, 2015 To: All Approved Mortgagees Mortgagee Letter 2015-01 Subject Reduction of Federal Housing Administration (FHA) annual Mortgage Insurance Premium (MIP) rates and Temporary Case Cancellation Authority Purpose This Mortgagee Letter (ML) communicates revised annual MIP rates for FHA Title II forward mortgages and provides opportunity for cancellation of existing case numbers in order to utilize the MIP rates contained in the ML. Background Pursuant to its statutory mandate, FHA continuously strives to achieve the appropriate balance between meeting the housing needs of the borrowers FHA’s mortgage insurance programs were created to serve and minimizing the level of risk undertaken relative to the insurance of those mortgages. FHA has determined that the appropriate balance of its statutory operational goals now requires a reduction of the rate of annual MIP charged pursuant to Section 203(c)(2)(B) of the National Housing Act (NHA). As provided in this ML, the total annual MIP charged pursuant to sections 203(c)(2)(B) and (C) for most Title II Single Family forward mortgages has been revised as provided in this ML. Effective Date This ML is effective for case numbers assigned on or after January 26, 2015. Affected Topic This ML reduces the rate for annual MIP for all Title II forward mortgages, with terms greater than 15 years, except; single family forward streamline refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009; Section 247 mortgages (Hawaiian Homelands) This ML supersedes the annual MIP rates established in ML 2013-4. All other sections of ML 2013-4 remain in effect. Mortgagee Letter 2015-01, Continued Revision to Annual Mortgage Insurance Premium The following table shows the existing and the new annual MIP rates by amortization term, base loan amount and Loan to Value (LTV) ratio. All New MIP amounts set forth in this table are effective for case numbers assigned on or after January 26, 2015. Term > 15 Years Base Loan Amt. LTV Previous MIP New MIP ≤ $625,500 ≤ 95.00% 130 bps 80 bps ≤ $625,500 > 95.00% 135 bps 85 bps > $625,500 ≤ 95.00% 150 bps 100 bps > $625,500 > 95.00% 155 bps 105 bps Term ≤ 15 Years ≤ $625,500 ≤ 90.00% 45 bps 45 bps ≤ $625,500 > 90.00% 70 bps 70 bps > $625,500 ≤ 78.00% 45 bps 45 bps > $625,500 78.01% - 90.00% 70 bps 70 bps > $625,500 > 90.00% 95 bps 95 bps Case Cancellation To allow mortgagees to obtain the reduced annual MIP rates contained in this ML for loans in process with active FHA Case Numbers, FHA will temporarily approve cancellation requests for active FHA Case Numbers within 30 days of the effective date of this ML. FHA will provide operational details on case cancellations through FHA Info notifications and on FHA’s lender information page available at www.hud.gov/lenders. 4000.1 FHA Single Family Housing Policy Handbook The policy in this ML is being incorporated into the 4000.1 FHA Single Family Housing Policy Handbook as Appendix 1.0 as shown in Attachment 1 of this ML. Questions Please address any questions about the topics addressed in this Mortgagee letter to the FHA Resource Center at 1-800-225-5342. Persons with hearing or speech impairments may reach this number via TTY by calling the Federal Information Relay Service at 1-800-877-8339. For additional information on this Mortgagee Letter, please visit www.hud.gov/answers. Signature ______________________________________________________________ Biniam Gebre Acting Assistant Secretary for Housing - Federal Housing Commissioner Attachment |
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