FHA Mortgage Insurance Premium Guidance
January 15, 2013
Early in 2012, the FHA and HUD issued some guidance in the form of Mortgagee Letter 2012-4, including news of a decrease to the annual Mortgage Insurance Premium for "certain Streamline Refinance transactions". According to the letter issued on March 6, 2012:
"For all SF Forward Streamline Refinance transactions that are refinancing FHA loans endorsed on or before May 31, 2009, the Annual MIP will be 55 bps, regardless of the base loan amount. The endorsement date is on the Case Query screen in FHA Connection. This change is effective for case numbers assigned on or after June 11, 2012."
But that wasn't the only chance--the mortgagee letter describes other changes to the up front mortgage insurance payments for these same loans:
"For all SF Forward Streamline Refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009, the UFMIP will decrease from 1 percent to 0.01 percent of the base loan amount. The endorsement date is on the Case Query screen in FHA Connection. This change is effective for case numbers assigned on or after June 11, 2012."
Ever since that announcement many FHA borrowers have been asking whether the FHA will make any exceptions to the 05/31/09 eligibility date set forth in ML 12-4 for lower MIP and/or UFMIP.
The FHA has addressed this question specifically on the FHA/HUD official site, simply stating:
"No. There are no exceptions to the May 31, 2009 eligibility date."
The official site adds, "Mortgagee Letter 2012-4 set out a lower Up-Front Mortgage Insurance Premium (MIP) and a lower Annual MIP for the refinancing of FHA-insured mortgages which FHA endorsed on or before May 31, 2009. FHA uses the endorsement date instead of the closing date because the endorsement date is when FHA becomes liable for the payment of a claim on a mortgage it insures."
Furthermore, "The May 31, 2009 eligibility date for lower Up-Front and Annual MIP aligns the FHA refinancing program with the Home Affordable Refinance Program, which is the Department of the Treasury's program for refinancing mortgages which are not insured by FHA, but are owned or guaranteed by Freddie Mac or Fannie Mae."
The FHA stance is clear--your home loan must meet the criteria mentioned in the mortgagee letter, or else it will not be eligible for the reduced MIP and UFMIP as announced in March of 2012.
"For all SF Forward Streamline Refinance transactions that are refinancing FHA loans endorsed on or before May 31, 2009, the Annual MIP will be 55 bps, regardless of the base loan amount. The endorsement date is on the Case Query screen in FHA Connection. This change is effective for case numbers assigned on or after June 11, 2012."
But that wasn't the only chance--the mortgagee letter describes other changes to the up front mortgage insurance payments for these same loans:
"For all SF Forward Streamline Refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009, the UFMIP will decrease from 1 percent to 0.01 percent of the base loan amount. The endorsement date is on the Case Query screen in FHA Connection. This change is effective for case numbers assigned on or after June 11, 2012."
Ever since that announcement many FHA borrowers have been asking whether the FHA will make any exceptions to the 05/31/09 eligibility date set forth in ML 12-4 for lower MIP and/or UFMIP.
The FHA has addressed this question specifically on the FHA/HUD official site, simply stating:
"No. There are no exceptions to the May 31, 2009 eligibility date."
The official site adds, "Mortgagee Letter 2012-4 set out a lower Up-Front Mortgage Insurance Premium (MIP) and a lower Annual MIP for the refinancing of FHA-insured mortgages which FHA endorsed on or before May 31, 2009. FHA uses the endorsement date instead of the closing date because the endorsement date is when FHA becomes liable for the payment of a claim on a mortgage it insures."
Furthermore, "The May 31, 2009 eligibility date for lower Up-Front and Annual MIP aligns the FHA refinancing program with the Home Affordable Refinance Program, which is the Department of the Treasury's program for refinancing mortgages which are not insured by FHA, but are owned or guaranteed by Freddie Mac or Fannie Mae."
The FHA stance is clear--your home loan must meet the criteria mentioned in the mortgagee letter, or else it will not be eligible for the reduced MIP and UFMIP as announced in March of 2012.
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