New FHA Forward Mortgage Insurance Premiums Take Effect

New Federal Housing Administration mortgage insurance premiums will take effect this week, after changes were passed in March to help strengthen the agency’s mutual mortgage insurance fund.

For FHA-insured forward loans grater than 15 years that have a less than or equal to 95% loan-to-value ratio, the new premium effective today is 120 basis points. For loans with terms 15 years or greater that have a greater than 95% LTV, the annual insurance premium paid by the borrower is 125 basis points.

Loans with less than or equal to 15-year terms will see mortgage insurance premiums of 35 basis points and 60 basis points for loans less than or equal to and greater than 90% LTV, respectively.

FHA also made changes for insurance premiums on loans in amounts exceeding $625,500, as specified in Mortgagee Letter 12-04.

The changes were made, FHA officials said in February, to help protect the stability of the mutual mortgage insurance fund. Reverse mortgages were not included in the changes and HUD officials told RMD upon the announcement that there weren’t any premium increases planned for FHA-insured Home Equity Conversion Mortgages.

View Mortgagee Letter 12-04.

Written by Elizabeth Ecker

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