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Reduction of Federal Housing Administration (FHA) annual Mortgage

posted Jan 19, 2015, 10:21 PM by Massey Kouhssari
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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