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HBU_Pennant.jpg 

Increase in the annual mortgage insurance premium

Given the legislative mandate in section 202 of the National Housing Act for ensuring that FHA’s Mutual Mortgage Fund (MMIF) remains financially sound, it is imperative that the MMIF is further strengthened to ensure that FHA will continue its historic role of providing a home financing vehicle during periods of economic volatility and its mission of helping underserved borrowers.

The charts below illustrate the 25 basis points (bps) increase in the Annual Mortgage Insurance Premiums.  There are no changes to the Upfront Mortgage Insurance Premium (UFMIP). It is anticipated that this increase will have minimal impact on borrowers but will significantly strengthen the capital position of the MMIF.

The increase in the Annual Mortgage Insurance Premiums for forward mortgage amortization terms is effective for case numbers assigned on or after April 18, 2011.

Mortgage Insurance Premiums

Loans > 15 years

UFMIP = 100 bps Annual Premium
LTV Through 4/03/2011* On/After 4/04/2011**
 ≤ 95.00 percent 85 bps 110 bps
 > 95.00 percent 90 bps 115 bps

Loans  ≤ 15 years

UFMIP = 100 bps Annual Premium
LTV Through 4/03/2011* On/After 4/04/2011 **
 ≤ 90.00  percent None 25 bps
 > 90.00 percent 25 bps 50 bps
* For case numbers assigned on/before April 17, 2011
** for case numbers assigned on/after April 18, 2011
Example of Annual Mortgage Insurance Premium Increase
30 year Term
 

≥ 95.00 percent LTV

Average Loan

October 2010
90 bps		 April 2011
115 bps
Sales Price $163,000 $163,000
Minimum downpayment (3.5%) $5,705 $5,705
Mortgage Amount without UFMIP $157,295 $157,295
FHA Annual MIP (Monthly payment) $118 $151
Change in payment (monthly) XXXXXXXXXXXXXXXXXXXX $33