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FHA MIP Cuts: Who Is Affected? A Reader Question

106A reader asks, “I am a homeowner with a FHA loan. I bought the house last year, I wanted to know if this will also benefit me or is just for you new perspective home owners? Thanks…”

This reader question is in reference to the FHA mortgage insurance premium cut that took effect on Monday January 26, 2015.

According to an FHA press release, “the Federal Housing Administration (FHA) will reduce the annual premiums new borrowers will pay by half of a percent.  This action is projected to save more than two million FHA homeowners an average of $900 annually and spur 250,000 new homebuyers to purchase their first home over the next three years.”

We wrote about this recently when the cuts took effect. But who is affected by these cuts and who can take advantage of them? Basically anyone who has an FHA “forward mortgage” greater than 15 years (with certain exceptions you’ll need to discuss with your lender) and who has an FHA loan case number assigned on or after January 26 2015 may be eligible.

Additionally the FHA has allowed a limited-time practice of lenders cancelling existing FHA loan case numbers and having them reassigned so that borrowers can get the benefit of the new FHA MIP cuts.

But only those who have existing FHA loan case numbers and have NOT closed their loans yet are eligible for this.

So the short answer is basically that if you have already closed your FHA loan you will pay the MIP that you agreed to in the mortgage loan agreement.

Do you have questions about FHA home loans? Ask us in the comments section.

Joe Wallace - Staff Writer

By Joe Wallace

January 27, 2015

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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About FHANewsBlog.com
FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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