Upcoming FHA changes

By
Mortgage and Lending with Primex Mortgage

Upcoming FHA changes

There are new FHA MI changes coming in mid April. They will apply to any new case number requested after April 18, 2011. The changes will be increasing the monthly MI on FHA loans. A case number is something requested from FHA, when you have an application and a subject property. You cannot request a generic case number, and apply it to a specific property later on. Your broker or lender handles requesting the case number.

The changes will increase the monthly mortgage insurance by 25 basis points. The reason behind this is because FHA would like to make the Mortgage Insurance FUnd stornger, for future lending practices. They believe that these changes will have a limited affect on borrower's payments.

The changes for loan terms above 15 years are as follows;

Up to  95% loan-to-value, the monthly fee will go from 85 to 110 basis points.
Above  95% loan-to-value, the monthly fee will go from 90 to 115 basis points.

For loans with a loan term below 15 years, the changes are as follows;

 
Up to 90% loan-to-value, currently it is zero, and now it will be 25 basis points.
Above 90% loan-to-value, currently it is 25 basis points, and now it will be 50 basis points.

As an example, on a 300k loan, the monthly payment will increase by about $50. 

Rockville FHA Loan Officer

Daily Rates-Rockville, Bethesda, Potomac, Gaithersburg, Germantown.

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Comments (2)

Karen Crowson
Coldwell Banker Residential Brokerage - Rancho Bernardo, CA
Your Agent for Change

Would be cool to present this information from the consumer's point of view.  How does this change their borrowing power?

Feb 23, 2011 09:33 AM
Alex Echeandia
Primex Mortgage - Rockville, MD

Hi Karen, the buying power would not be affected by much, unless the buyer's have very high debt rations and the new payment pushes them over the limit the lender will allow.

There was talk a few months back, that they could increase the monthly MI as high as 1.5. Which is another 35 basis points from the upcoming change. There may be some more changes coming down the road, but right now, nothing has been confirmed.

Feb 23, 2011 09:55 AM