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SUPERSEDED IN WHOLE BY HB 4000.1

ML 2013-04: Revision of Federal Housing Administration (FHA) policies concerning cancellation of the annual Mortgage Insurance Premium (MIP) and increase to the annual MIP (02/01/13)

To:	All Approved Mortgagees

Subject

Revision of Federal Housing Administration (FHA) policies concerning cancellation of the annual Mortgage Insurance Premium (MIP) and increase to the annual MIP

Purpose

Consistent with FHA’s ongoing efforts to strengthen the Mutual Mortgage Insurance Fund, FHA is:

revising the period for assessing the annual MIP;
removing the exemption from the annual MIP for loans with terms of 15 years or less and Loan to Value (LTV) ratios of less than or equal to 78 percent at origination; and
increasing the annual MIP on all forward mortgages except single family forward streamline refinance transactions that refinance existing FHA loans that were endorsed on or before May 31, 2009 (see ML 2012-4).

Effective Date

The section of this ML that increases the annual MIP is effective for case numbers assigned on or after April 1, 2013, except as noted below.

The following sections of this ML are effective for all mortgages with FHA case numbers assigned on or after June 3, 2013:

revision to the period for assessing the annual MIP;
removal of the exemption from the annual MIP for loans with terms of 15 years or less and LTVs of less than or equal to 78 percent at origination;
increase in the annual MIP for mortgages with terms less than or equal to 15 years and LTV ratios less than or equal to 78 percent at origination.

Affected Topics

This ML:

rescinds the automatic cancellation of the annual MIP collection announced in MLs 2000-38 and 2000-46;
rescinds ML 2011-35, under which mortgages with terms of 15 years or less and LTVs of less than or equal to 78 percent at time of origination were exempt from the annual MIP; and
rescinds and updates Sections 7.3.a, 7.3.c, 7.3.d, 7.3.e, 7.3.f, and 7.3.g of HUD Handbook 4155.2 as appropriate.

This ML increases the annual MIP on all forward mortgages previously announced in ML 2012-4, except single family forward streamline refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009; the rate for those streamline transactions remains at the level announced in ML 2012-4.

Revision to the Period for Assessing Annual MIP

For loans with FHA case numbers assigned on or after June 3, 2013, FHA will collect the annual MIP for the maximum duration permitted under statute. See 12 U.S.C. § 1709(c)(2)(B).

For all mortgages regardless of their amortization terms, any mortgage involving an original principal obligation (excluding financed Up-Front MIP (UFMIP)) less than or equal to 90 percent LTV, the annual MIP will be assessed until the end of the mortgage term or for the first 11 years of the mortgage term, whichever occurs first.
For any mortgage involving an original principal obligation (excluding financed UFMIP) with an LTV greater than 90 percent, FHA will assess the annual MIP until the end of the mortgage term or for the first 30 years of the term, whichever occurs first.

Note: FHA calculates LTV as a percentage by dividing the loan amount (prior to the financing of any UFMIP) by the lesser of the purchase price (if applicable) or the appraised value of the home. For streamline refinances without appraisals, FHA uses the original appraised value of the property to calculate the LTV.

The table below shows the previous and the new duration of annual MIP by amortization term and LTV ratio at origination.

Term	LTV (%)	Previous	New
≤ 15 yrs	≤ 78	No annual MIP	11 years
≤ 15 yrs	> 78 – 90.00	Cancelled at 78% LTV	11 years
≤ 15 yrs	> 90.00	Cancelled at 78% LTV	Loan term
> 15 yrs	≤ 78	5 years	11 years
> 15 yrs	> 78 – 90.00	Cancelled at 78% LTV & 5 yrs	11 years
> 15 yrs	> 90.00	Cancelled at 78% LTV & 5 yrs	Loan term

Increase to Annual Mortgage Insurance Premium

Under Public Law 111-229(1)(b), FHA may adjust its mortgage insurance premium rates, as measured in basis points (bps), by Mortgagee Letter.

The first table shows the previous and the new annual MIP rates by amortization term, base loan amount and LTV ratio. All MIPs in this table are effective for case numbers assigned on or after April 1, 2013.

Term > 15 Years
Base Loan Amt.	LTV	Previous MIP	New MIP
≤ $625,500	≤ 95.00%	120 bps	130 bps
≤ $625,500	> 95.00%	125 bps	135 bps
> $625,500	≤ 95.00%	145 bps	150 bps
> $625,500	> 95.00%	150 bps	155 bps
Term ≤ 15 Years
≤ $625,500	78.01% - 90.00%	35 bps	45 bps
≤ $625,500	> 90.00%	60 bps	70 bps
> $625,500	78.01% - 90.00%	60 bps	70 bps
> $625,500	> 90.00%	85 bps	95 bps

The second table shows the previous and the new effective annual MIP rates for loans with an LTV of less than or equal to 78 percent and with terms of up to 15 years. The new annual MIP for these loans is effective for case numbers assigned on or after June 3, 2013.

Term ≤ 15 Years
Base Loan Amt.	LTV	Previous MIP	New MIP
Any Amount	≤ 78.00 %	0 bps	45 bps

Exceptions to MIP Duration Changes

The changes to the duration of the annual MIP as specified in this ML are effective for all Single Family FHA programs for which FHA charges an annual MIP except:

Title I
Home Equity Conversion Mortgages (HECM)

Exceptions to Announced MIP Increases.

The increases in the annual MIP specified in this ML apply to all mortgages insured under FHA’s Single Family Mortgage Insurance Programs except:

Streamline refinance transactions of existing FHA loans that were endorsed on or before May 31, 2009 (see ML 2012-04)
Title I
Home Equity Conversion Mortgages (HECM)
Section 247 (Hawaiian Homelands)
Section 248 (Indian Reservations)

user reply:
Do you have anything that is this beautiful showing all the wonderful changes to the UFMIP and the monthly MI prior to the changes in 2013?

From: No Reply [mailto:Helpdesk@1hallmark.com] CURRENT
Sent: Monday, March 12, 2018 9:46 AM
To: David Seiwert <DSeiwert@1hallmark.com>
Subject: New reply added to Ticket # 755 - FHA Monthly MI from 2012

Most of the FHA monthly premiums are life of loan unless LTV <90%. Chart is below

PPENDIX 1.0 – MORTGAGE INSURANCE PREMIUMS (09/14/15)

Upfront Mortgage Insurance Premium (UFMIP)

All Mortgages: 175 Basis 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
Less than or equal to $625,500	> 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
All	> 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 MIP (UFMIP)
	Loan Term 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.

Original question:
I had a customer that I did an FHA loan in March of 2012 contact me. I want to confirm the monthly MI rate and the terms to have the PMI portion of the payment removed.