The following changes to FHA Mortgage Insurance Premiums (MIP) will take effect with the respective case number assignment dates, April 1st, 2013 and June 3rd, 2013. These changes are big and may affect borrowers affordability and/or ability to qualify for FHA financing.
NOTE: These changes only affect FHA Loans with case numbers assigned after April 1st, 2013 and has nothing to do with the Sales closing date. Therefore, If you have a FHA case number assigned on March 31st, but the sale is closed sometimes in May or after, these changes will not affect your purchase.
These MIP Rate and Duration changes include:
FHA MIp Policy Change starting April 1, 2013
The increases in the annual MIP specified in this article apply to all mortgages insured under FHA’s Single Family Mortgage Insurance Programs except:
For all SF Forward Streamline Refinance transactions that are refinancing FHA loans endorsed on or before May 31, 2009, the Annual MIP will be .55% (55 bps), regardless of the base loan amount and the UFMIP will be stayed at decreased value (1 bps) 0.01% of the base loan amount.
HUD "Title I" insures private lenders against loss on property improvement loans they make. HUD does not lend money for property improvements. Title I can be used in connection with a 203k Rehabilitation Mortgage. For additional information on HUD "Title I", please visit HUD website at http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/title/ti_abou
Reverse mortgages are increasing in popularity with seniors who have equity in their homes and want to supplement their income. The only reverse mortgage insured by the U.S. Federal Government is called a Home Equity Conversion Mortgage or HECM, and is only available through an FHA approved lender.
FHA's mortgage insurance provides opportunities to low- and moderate-income Native Hawaiians to purchase a home on Hawaiian home lands. FHA insures loans made to native Hawaiians to purchase one- to four-family dwellings located on Hawaiian home lands.
FHA case numbers assigned on or after April 1, 2013 mean BIG changes for borrowers and may affect their ability to qualify for FHA financing. These changes include:
FHA MIp Policy Change starting June 3, 2013
Effective with FHA case numbers assigned on or after June 3, 2013 FHA Mortgage Insurance Duration will change.
The changes to the duration of the annual MIP as specified in this article are effective for all Single Family FHA programs for which FHA charges an annual MIP except
HUD "Title I" insures private lenders against loss on property improvement loans they make. HUD does not lend money for property improvements. Title I can be used in connection with a 203k Rehabilitation Mortgage.
Reverse mortgages are increasing in popularity with seniors who have equity in their homes and want to supplement their income. The only reverse mortgage insured by the
U.S. Federal Government is called a Home Equity Conversion Mortgage or HECM, and is only available through an FHA approved lender. Impact Analysis (Example):
To better understand the impact of these changes on a borrower, let's use an example with following assumptions.
Let's assume a borrower is purchasing a house at $200,000 with 3.5% down (LTV=97.5%), and getting a 30-year fixed FHA loan at 4%.
Today, prior to April 1st, 2013, The Monthly MIP Rate and Duration are as follow:
After June 3rd, 2013, The new Monthly MIP Rate and Duration would be as follow:
Increase Monthly MIP
A summary of these results are shown in Figure 1.
Series 1: with FHA case numbers assigned on or before April 1, 2013, Total Monthly MIP would be paid 124 Months * $201.04/Month= $24,928
Series 2: with FHA case numbers assigned on or after April 1, 2013, AND before June 3, 2013:
For more information about these changes and changes related to Base Loan Amount > $625,500, please visit HUD website at Mortgagee Letter 2013-04.
To calculate the Current MIP and UFMIP Rates Prior to April 2013, For Different Cases please visit my site at http://www.TexasFiveStarRealty.com/FHA_MIP_UFMIP_Calculator.asp
Click 2013 FHA MIP Impact Analysis Calculator to See the Affect of New MIP Rates (April 1st, 2013) and MIP Duration (June 3, 2013) For Different Cases
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