This update announces the guidelines for FHA's Risk Based Premium model. For the first time in history, FHA will take credit scores into account. These guidelines are effective as of July 14th, 2008. At the bottom of the page is a link to the full update.
The 10 primary guideline changes are as follows:
1. Borrowers need either no score, or at least 500, to get a LTV >90%; see matrix below.
2. Borrowers with a score less than 500 get a maximum LTV of 90%.
3. Borrowers without scores will require manual underwriting.
4. Upfront Mortgage Insurance Premiums will range from 1.25% - 2.25%, based on score.
5. The Monthly Mortgage Insurance will range from .50% to .55% depending on score.
6. The premium is based on the borrower with the lowest score.
7. If one of the borrowers has no score, then the Non-Traditional credit grade is used.
8. Credit rescoring is allowed to improve a borrower's credit grade.
9. All FHA Secure refinances >95% LTV with delinquencies have a 2.25% UFMIP and .55% MMI.
10. Cash-out, rate & term, and non-delinquent FHA Secure refinances are included in this change.
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FHA Single Family Mortgage Insurance
Upfront and Annual Mortgage Insurance Premiums
(Loan Terms > 15 years)
Effective as of July 14, 2008
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All premiums are specified in basis points (0.01%)
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Decision Credit Score (FICO)
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LTV
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850-680
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679-640
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639-600
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599-560
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559-500
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499-300
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NON-TRADITIONAL
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≤ 90.00
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125/50
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125/50
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125/50
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150/50
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175/50
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175/50
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150/50
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90.01-95.00
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125/50
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125/50
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150/50
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175/50
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200/50
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n/a
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175/50
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> 95
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125/55
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150/55
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175/55
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200/55
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225a/55
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n/a
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200/55
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- A first-time homebuyer, with HUD-approved counseling, will pay only 200 basis points for the upfront mortgage insurance premiums.
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Joe:
Thanks for the FHA table. I try to keep updated on information that my customers might need. That definitely is something that we, as Realtors, are going to need to know to be good fiduciaries for our customers.
By the way, my wife and I are a real estate team in Norman, OK. with Keller Williams Realty and would love to keep you in mind for referrals for you. Have a great weekend!
Stan