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FHA Annual Mortgage Insurance Premium Changes

When the FHA and HUD recently announced a reduction in mortgage insurance premiums for streamline refinancing loans, there was also a reminder of a pending increase to other mortgage insurance premiums.

In late 2011, an act was signed into law which results in an increase in annual FHA mortgage insurance premiums for non-streamline FHA loans.

According to FHA Mortgagee Letter 12-4, “On December 23, 2011, the President signed into law the Temporary Payroll Tax Cut Continuation Act of 2011 (Public Law 112-78), which requires FHA to increase the Annual MIP it collects by 10 basis points”. This change is for FHA loans with case numbers assigned on or after April 9, 2012. Borrowers who get FHA loan case numbers before this date would pay the mortgage insurance premiums current for their type of FHA loan transaction.

Borrowers with FHA loans that meet certain conditions are still exempt from paying annual FHA mortgage insurance premiums. What are those conditions? According to the FHA;

“…forward mortgages with amortization terms of 15 years or less, and a loan-to-value (LTV) ratio of 78 percent or less” will remain exempt from the Annual MIP.

FHA loan applicants naturally want to know how much mortgage insurance they will be required to pay for FHA insured home loans on or after April 9, 2012. Here is the table, which shows the new amounts:

Borrowers should know these amounts are calculated against the loan amount, so there is no flat fee or figure we can provide to give an idea of how much you would pay in FHA mortgage insurance premiums under the new changes. Consult with your lender to get a calculation on your estimated annual premium based on your specific FHA loan amount.

2 Responses to FHA Annual Mortgage Insurance Premium Changes

  1. Karen says:

    Hello,

    My husband and I have a CAL FHA loan. The home was purchased in 2007, we have never been late on a payment. We want to reduce our interest rate but our home is worth much less than we paid for it now. We are also paying PMI. How can we tell if our PMI will increase as much as our mortgage will decrease? We don’t want to pay the fees involved just to find out it is costing us the same or more every month, or that we don’t qualify. We had called our FHA lender a while ago and were told “There is nothing we can do for you”. We had never heard of Streamline and are surprised it was not offered to us as an option? I just found out about it yesterday from an online search.

    Thanks,

    • Joe Wallace says:

      Have you tried contacting the FHA directly to get more information about your refinancing options? Try 1-800 CALL FHA, which is the official number for the FHA, not a private company. Where PMI is concerned, you should contact your private mortgage insurance provider to get answers on these issues–every company has its own policies and procedures.

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