With the passing of H.R. 5981 and the resulting Public Law 111-229, FHA was given authority to change the amount charged to borrowers for both the Up Front and the Annual premiums. These changes as outlined in Mortgagee Letter 2010-28, are effective for all case numbers assigned on or after October 4th, 2010.
Here are the 6 things you need to know about these changes:
- The Up Front premium is now 1.0 % for all standard FHA programs (purchase money mortgages, full credit-qualifying refinances, streamline refinances)
| - The Annual premium is now .90% for LTVs GREATER than 95% on 30 year loans
- The Annual premium is now .85% for LTVs EQUAL to or LESS than 95% on 30 year loans
- The Annual premium is now .25% for LTVs GREATER than 90% on 15 year loans
- The Annual premium is now .00% for LTVs EQUAL to or LESS than 90% on 15 year loans
- These premiums apply to purchases, regular refinances and streamlines
Please note that this new law also gives FHA the authority to raise the Annual premium at will up to 1.5% for LTVs at or below 95% and 1.55% for LTVs more than 95%.
Click here to read Mortgagee Letter 2010-28 in its entirety.
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