Reduction of Federal Housing Administration (FHA) annual Mortgage

Post date: Jan 20, 2015 6:21:52 AM

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,


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





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



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

4000.1 FHA

Single Family

Housing Policy


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

Signature ______________________________________________________________

Biniam Gebre

Acting Assistant Secretary for Housing - Federal Housing Commissioner