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HUD Mortgagee Letter
Reduction of Federal Housing Administration (FHA) annual Mortgage Insurance Premium (MIP) rates and Temporary Case Cancellation Authority
 
 
Citation:
ML 2015-01
Agency:
Housing and Urban Development
Type:
HUD Mortgagee Letter
Publish Date:
Jan 09, 2015
Expire Date:
Dec 30, 2016
Keywords:
Source:
Attachment(s):
Citation:
ML 2015-01
Agency:
Housing and Urban Development
Type:
HUD Mortgagee Letter
Publish Date:
Jan 09, 2015
Expire Date:
Dec 30, 2016
Keywords:
Source:
Attachment(s):
 

Summary

HUD Mortgagee Letter ML 2015-01 communicates revised annual MIP rates for FHA Title II forward mortgages and provides opportunity for cancellation of existing case numbers in order to utilize the MIP rates contained in the ML.

This ML reduces the rate for annual MIP for all Title II forward mortgages, with terms greater than 15 years, except;
- single family forward streamline refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009;
- Section 247 mortgages (Hawaiian Homelands)

This ML supersedes the annual MIP rates established in ML 2013-4. All other sections of ML 2013-4 remain in effect.

This Mortgagee Letter is effective for case numbers assigned on or after January 26, 2015.

HUD Mortgagee Letter


U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
WASHINGTON, DC 20410-8000

 

ASSISTANT SECRETARY FOR HOUSING – FEDERAL HOUSING COMMISSIONER

 

Date: January 9, 2015

 

Mortgagee Letter 2015-01

 

To:
All Approved Mortgagees

 

Subject

Reduction of Federal Housing Administration (FHA) annual Mortgage Insurance Premium (MIP) rates and Temporary Case Cancellation Authority

 

Purpose

This Mortgagee Letter (ML) communicates revised annual MIP rates for FHA Title II forward mortgages and provides opportunity for cancellation of existing case numbers in order to utilize the MIP rates contained in the ML.

 

Background

Pursuant to its statutory mandate, FHA continuously strives to achieve the appropriate balance between meeting the housing needs of the borrowers FHA’s mortgage insurance programs were created to serve and minimizing the level of risk undertaken relative to the insurance of those mortgages. FHA has determined that the appropriate balance of its statutory operational goals now requires a reduction of the rate of annual MIP charged pursuant to Section 203(c)(2)(B) of the National Housing Act (NHA). As provided in this ML, the total annual MIP charged pursuant to sections 203(c)(2)(B) and (C) for most Title II Single Family forward mortgages has been revised as provided in this ML.

 

Effective Date

This ML is effective for case numbers assigned on or after January 26, 2015.

 

Affected Topic

This ML reduces the rate for annual MIP for all Title II forward mortgages, with terms greater than 15 years, except;

  • single family forward streamline refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009;
  • Section 247 mortgages (Hawaiian Homelands)

This ML supersedes the annual MIP rates established in ML 2013-4. All other sections of ML 2013-4 remain in effect.

 

Revision to Annual Mortgage Insurance Premium

The following table shows the existing and the new annual MIP rates by amortization term, base loan amount and Loan to Value (LTV) ratio. All New MIP amounts set forth in this table are effective for case numbersassigned on or after January 26, 2015.

 

Term > 15 Years

Base Loan Amt.

LTV

Previous MIP

New MIP

<= $625,500

<=95.00%

130 bps

80 bps

<= $625,500

>95.00%

135 bps

85 bps

> $625,500

<=95.00%

150 bps

100 bps

> $625,500

>95.00%

155 bps

105 bps

Term <= 15 Years

<= $625,500

<= 90.00%

45 bps

45 bps

<= $625,500

> 90.00%

70 bps

70 bps

> $625,500

<= 78.00%

45 bps

45 bps

> $625,500

 78.01% - 90.00%

70 bps

70 bps

> $625,500

>90.00%

95 bps

95 bps

 

Case Cancellation

To allow mortgagees to obtain the reduced annual MIP rates contained in this ML for loans in process with active FHA Case Numbers, FHA will temporarily approve cancellation requests for active FHA Case Numbers within 30 days of the effective date of this ML.

FHA will provide operational details on case cancellations through FHA Info notifications and on FHA’s lender information page available at www.hud.gov/lenders.

 

4000.1 FHA Single Family Housing Policy Handbook

The policy in this ML is being incorporated into the 4000.1 FHA Single Family Housing Policy Handbook as Appendix 1.0 as shown in Attachment 1 of this ML.

 

Questions

Please address any questions about the topics addressed in this Mortgagee letter to the FHA Resource Center at 1-800-225-5342. Persons with hearing or speech impairments may reach this number via TTY by calling the Federal Information Relay Service at 1-800-877-8339. For additional information on this Mortgagee Letter, please visit www.hud.gov/answers.

 

Signature

 

Biniam Gebre
Acting Assistant Secretary for Housing - Federal Housing Commissioner

 

 

Attachment


 

APPENDIX 1.0 – MORTGAGE INSURANCE PREMIUMS

 

Upfront Mortgage Insurance Premium (UFMIP)

All Mortgages: 175 basic points (bps) (1.75%) of the Base Loan Amount.

Exceptions:

  • Streamline Refinance and Simple Refinance Mortgages used to refinance a previous FHA-endorsed Mortgage on or before May 31,2009
  • Hawaiian Home Lands (Section 247)
  • Indian Lands (Section 248)

Indian Lands (Section 248) do not require a UFMIP.

 

 

Annual Mortgage Insurance Premium (MIP)

Applies to all Mortgages except:

  • Streamline Refinance and Simple Refinance Mortgages used to refinance a previous FHA endorsed Mortgage on or before May 31,2009
  • Hawaiian Home Lands (Section 247)

Hawaiian Home Lands (Section 247) do not require Annual MIP.

Mortgage Term of More Than 15 Years

Base Loan Amount

LTV

MIP (bps)

Duration

Less than or equal to $625,500

<= 90.00%

80

11 Years

> 90.00% but <=  95.00%

80

Mortgage term

> 95.00%

85

Mortgage term

Greater than $625,500

<= 90.00%

100

11 Years

> 90.00% but <=  95.00%

100

Mortgage term

> 95.00%

105

Mortgage term

Mortgage Term of Less than or Equal to 15 Years

Base Loan Amount

LTV

MIP (bps)

Duration

Less than or equal to $625,500

<= 90.00%

45

11 Years

> 90.00%

70

Mortgage term

Greater than $625,500

<= 78.00%

45

11 Years

> 78.00% but <=  90.00%

70

11 Years

> 90.00%

95

Mortgage term

 

Streamline Refinance, Simple Refinance:

For Refinance of previous mortgage endorsed on or before May 31, 2009

UFMIP: 1 (bps) (.01%) All mortgages

All Mortgage Terms

Base Loan Amount

LTV

Annual MIP (bps)

Duration

   All

<= 90.00%

55

11 Years

> 90.00%

55

Mortgage term

For mortgages where FHA does not require an appraisal, the value from the previous mortgage is used to calculate the LTV.

 

Hawaiian Home Lands Section 247

Hawaiian Home Lands Upfront MP (UFMIP)

 

Loan Terms in Years

 

<= 18

>18 and <=22

>22 and <=25

>25

MIP Financed

2.400%

3.000%

3.600%

3.800%

MIP not Financed

2.344%

2.913%

3.475%

3.661%

Annual MIP is not assessed on Section 247 Mortgages

 



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