July 14th is the date for the new FHA mortgage insurance premium changes. In the past, FHA borrowers all paid the same up front and monthly MIP premiums, regardless of their specific risk factors or credit score. That is about to change. These new policies will apply to any transaction where HUD's case number is issued on or after 7/14/08.
Previously, FHA's up front (financed) MIP was 1.5% of the base loan amount and the monthly premium was calculated by multiplying the loan amount by .5% and then dividing by 12 (for example, on a $100,000 loan, $100,000 x .5% = $500, divided by 12 = $42.50/month).
As of 7/14/08, the up front and monthly premiums will be adjusted by credit score and loan term. As our FHA buyers generally use 30 year terms to keep their payments affordable, I have l pasted the grid for the "over 15 year terms" below:
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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 |
850-680 |
679-640 |
639-600 |
599-560 |
559-500 |
499-300 |
NON-TRADITIONAL |
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≤ 90.00 |
125/50
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125/50 |
125/50 |
150/50 |
175/50 |
175/50 |
150/50 |
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90.01-95.00 |
125/50
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125/50 |
150/50 |
175/50 |
200/50 |
n/a |
175/50 |
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> 95 |
125/55
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150/55 |
175/55 |
200/55 |
225a/55 |
n/a |
200/55 |
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•a. A first-time homebuyer, with HUD-approved counseling, will pay only 200 basis points for the upfront mortgage insurance premiums.
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