FHA Mortgage Insurance Premiums Lowered Starting January 27

Dated: 01/23/2017

Views: 158

-AA+A

HUD Lowers FHA MIP by a Quarter Point

DAILY REAL ESTATE NEWS | MONDAY, JANUARY 09, 2017

Mortgage insurance premiums on FHA-backed loans will be lower by 25 basis points on loans endorsed starting January 27, the federal government announced today.

“After four straight years of growth and with sufficient reserves on hand to meet future claims, it’s time for FHA to pass along some modest savings to working families,” Julian Castro, secretary of the U.S. Department of Housing and Urban Development, announced today.


NAR President Bill Brown praised the move. “Dropping mortgage insurance premiums will mean a lot more responsible borrowers are eligible to purchase a home through FHA,” he said. “That puts more money in the fund to protect taxpayers, and it puts more families in homes so they can live out the American dream.”

The new premium schedule, which takes effect for residential mortgage loans that have an insurance endorsement date on or after January 27,  is expected to save the average home buyer $500 a year in insurance costs.

In its announcement, HUD said the reduced premiums reflect the healthy state of HUD’s mutual mortgage insurance fund, which is the agency’s principle fund for insuring FHA mortgages. “We’ve carefully weighed the risks associated with lower premiums with our historic mission to provide safe and sustainable mortgage financing to responsible homebuyers,” said Edward Golding, HUD principal deputy assistant secretary for housing. “This conservative reduction in our premium rates is an appropriate measure to support [home buyers] on their path to the American dream.”

Under the new schedule, a home purchase with a base loan amount of up to $625,000, with an 85-percent loan-to-value ratio and a 30-year loan term, will require an annual mortgage insurance premium of 55 basis points, down from 80 basis points.  A 15-year loan of that same amount and with a 90-percent LTV ratio will require an MIP of 25 basis points, down from 45. Access the full schedule.

NAR is calling on FHA to take even more steps to help home buyers, including eliminating FHA’s “life of loan” mortgage insurance requirement, which forces borrowers to maintain mortgage insurance regardless of their equity position. Borrowers with traditional mortgage insurance can typically extinguish their mortgage insurance once they reach 20 percent equity in the property. “Our work continues, but we’re encouraged by today’s announcement,” Brown said.

—By Robert Freedman, REALTOR® Magazine


I have lived in the beautiful state of Colorado for over 16 years. In addition to the Realtor education, which I continue to enhance every chance I get, I earned a Bachelor’s Degree in Communications from the University of Colorado at Denver.

I have nearly 7 years of experience in Real Estate Investing, during which I’ve learned how much I enjoy the industry. This passion for Real Estate, combined with the passion for helping others, made me realize that being a Realtor is my perfect fit!

I am passionate about the needs and goals of my clients and will do absolutely everything in my power to ensure your success. Whether you are buying or selling, I will focus on taking the pressure off of you so you can make clear and concise decisions throughout the process and will bring savvy negotiations and cutting-edge marketing strategies to the table. It is my priority to provide great customer service, consistent communication, strong attention to detail and ensure a positive experience for all parties in a transaction.

If you are looking for great home buying or selling experience, call Olga today at 720-365-4651


Blog author image

Olga Telesin

My name is Olga Telesin and I am a Colorado Realtor helping buyers and sellers around the Denver Metro areas of Colorado, including Denver, Aurora, Parker, Centennial, Highlands Ranch, Castle Rock and....

Want to Advertise on this Site?

Latest Blog Posts

Denver Open Houses This Weekend Under 500K

OPEN HOUSES IN DENVER THIS WEEKEND#OPENHOUSEDENVERHere is a list of all Open Houses from the MLS this weekend. Feel free to check out our Featured home too! Location for the featured PropertyBe Sure

Read More

Beautiful Centennial Home Is Ready For You

20778 E Maplewood Lane - $520,0004 Bedrooms / 3 Bathrooms / 2 Car GarageWelcome home to Greenfield! Voted in 2017 as one of the best neighborhoods in the Denver Metro area w/ a top 500 nationwide

Read More

Coming Soon 4bed 2bath Under 275k In Denver

Coming Soon!!!!580 Bountiful Ct, Denver, CO 80221Listed by Kevin Fletcher -  Exit Realty Cherry Creek.Price $275,000See ZILLOW Listing Here For more info4 beds 2 baths 1,558,

Read More

Denver Construction Shows No Signs Of Slowing

This is a great article around the construction boom we've all seen.  Be sure to click the link at the bottom and check out the map of proposed development downtown...Development boom:

Read More