In response to the passing of HR 3221, this update announces FHA's new Mortgage Insurance Premiums for the period of October 1st, 2008 through September 30th, 2009. FHA's Risk Based Premiums that went into effect on July 14th, 2008 will be on hold until October 1st, 2009.
Here are the 6 things you need to know about these changes...
1. Up-front Mortgage Insurance Premiums:
- Purchase Money Mortgages and Full-Credit Qualifying Refinances = 1.75%.
- Streamline Refinances (all types) = 1.50%.
- FHASecure (Delinquent Mortgagors) = 3.00%.
2. Monthly Mortgage Insurance Premiums:
- For 30 year loans with LTV > 95%, monthly will be .55%.
- For 30 year loans with LTV < 95%, monthly will be .50%.
- For 15 year loans with LTV > 90%, monthly will be .25%.
- For 15 year loans with LTV < 90%, monthly will not be required.
- For FHASecure loans with LTV > 95%, monthly will be .55%.
- For FHASecure loans with LTV < 95%, monthly will be .50%.
3. Mortgages with FHA case number assignments made on July 14, 2008, through and including September 30, 2008, shall maintain the risk-based premium structure for the life of the mortgage.
4. FHA will issue another notice that will formally advise when the moratorium is concluded and the premium pricing structure that should be followed once the moratorium ends.
5. Credit Scores:
- Borrowers with credit scores below 500 will require an LTV of 90% or less.
- Borrowers with 3 scores, the middle score is used.
- Borrowers with 2 scores, the lowest score is used.
6. These premium changes apply to the following FHA loan programs: 203b (standard 1-4 unit property), 203k (rehab loan), and 234c (condominiums) and do not apply to FHA reverse mortgages.
We are still awaiting more changes in response to HR 3221 so watch for future updates.