New Mortgage Insurance rules for FHA loans are now in effect

June 3, 2013 - Home Buying, Insurance

MIP/PMI Changes

As of June 3, 2013, new rules for FHA Mortgages have gone into effect concerning Mortgage Insurance (PMI/MIP). These changes include:1: revision to the period for assessing the annual MIP;

2: removal of the exemption from the annual MIP for loans with terms of 15 years or less and LTVs of less than or equal to 78 percent of origination;

3: increase in the annual MIP for mortgages with terms less than or equal to 15 years and LTV ratios less than or equal to 78 percent at origination.

Revision to the Period for Assessing Annual MIP

The table below shows the previous and the new duration of annual MIP by amortization term and LTV ratio at origination.

Term	LTV (%)	Previous	New
≤ 15 yrs	≤ 78	No annual MIP	11 years
≤ 15 yrs	> 78 – 90.00	Cancelled at 78% LTV	11 years
≤ 15 yrs	> 90.00	Cancelled at 78% LTV	Loan term
> 15 yrs	≤ 78	5 years	11 years
> 15 yrs	> 78 – 90.00	Cancelled at 78% LTV & 5 yrs	11 years
> 15 yrs	> 90.00	Cancelled at 78% LTV & 5 years	Loan term

Increase to Annual Mortgage Insurance Premium

The first table shows the previous and the new annual MIP rates by amortization term, base loan amount and LTV ratio. All MIPs in this table are effective for case numbers assigned on or after April 1, 2013.

Term > 15 Years
Base Loan Amt.	LTV	Previous MIP	New MIP
≤ $625,500	≤ 95.00%	120 bps	130 bps
≤ $625,500	> 95.00%	125 bps	135 bps
> $625,500	≤ 95.00%	145 bps	150 bps
> $625,500	> 95.00%	150 bps	155 bps
Term ≤ 15 Years
≤ $625,500	78.01% – 90.00%	35 bps	45 bps
≤ $625,500	> 90.00%	60 bps	70 bps
> $625,500	78.01% – 90.00%	60 bps	70 bps
> $625,500	> 90.00%	85 bps	95 bps

The second table shows the previous and the new effective annual MIP rates for loans with an LTV of less than or equal to 78 percent and with terms of up to 15 years. The new annual MIP for these loans is effective for case numbers assigned on or after June 3, 2013.