Yes, as soon as I advised everyone to wait for FHA’s announcement, it was released. FHA released the mortgagee letter today finalizing the changes in monthly and upfront mortgage insurance.
The changes are effective for any case numbers ordered on or after October 4, 2010. The changes apply to all traditional FHA purchase and refinance mortgages, including FHA and FHA streamlines.
The Up Front Mortgage Insurance Premium will now be one percent of the base loan amount. The monthly mortgage insurance will depend on the loan-to-value (LTV) ratio. Loans with an LTV of 95 percent or less will be subject to a monthly mortgage insurance payment of 85 basis points. Loans with an LTV exceeding 95 percent will be subject to a monthly mortgage insurance payment of 90 basis points. These changes only apply to amortization periods greater than 15 years. Guidelines for loans with amortization periods of 15 years or less remain unchanged.
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