New FHA Changes

Upcoming FHA changes
On Feb. 14th HUD released a new mortgagee letter about the upcoming FHA MI changes coming down the pike. The biggest change is that the FHA monthly mortgage insurance premium will be going up for all case numbers requested after April 18, 2011. The upfront mortgage insurance premium will not be increased. This change only applies to the monthly MI.
Currently, the monthly mortgage insurance for loans with a loan term above 15 years is .85 basis points up to 95% loan-to-value and .90 basis points for loan-to-values above 95%. In the new format, loans up to 95% LTV will have 110 basis points for monthly mortgage insurance and loans with loan-to-values above 95% will have 115 basis points.
For loans with a loan term of 15 years or below, the changes will be;
Up to 90% loan-to-value, currently it is Zero, and now it will be 25 basis points.
Over 90% loan-to-value, currently it is 25 basis points and now, it will be 50 basis points.
This has been done to strengthen the FHA Mortgage Insurance fund. They believe it will have little effect on borrowers but a substantial positive effect for FHA.  
The case number is what is requested from FHA, once you have an application and a specific property. You cannot request a generic case number, to be applied later on.

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