2013 | FHA Mortgage Insurance Changes

Please Note FHA has made many subsequent Changes since this Change
Please contact the HOUSE Team with questions and up to date FHA regulations

Arizona FHA buyer‘s buckle up, FHA is at it again.  As of January 31, 2013 FHA  executed the mortgage insurance related changes we announced just a few months back.  For those veracious readers, check out the official FHA announcement here.  For the rest like me (who had to spells check “veracious”) here is a brief overview.

Apply Now for a FHA Home Loan
Email: Team@JeremyHouse.com
Phone:  602.435.2149

FHA’s 2 Big Changes

1. Monthly Mortgage Insurance Cost – specific change depends on loan scenario
2. Future Mortgage Insurance Payments No Longer are Eliminated  – specific change depends on loan scenario

There are 2 effective dates for each change for Phoenix FHA buyers.

1. April 1, 2013
2. June 3, 2013 

April 1, 2013 changes are GREEN.   June 3,2013 changes are BLUE.  FHA’s effective change dates anchor on FHA case # assignment not closing date.  Effective dates in the land of FHA are also “on or after” dates.  Case numbers assigned on or after these dates are subject to the change.

Apply Now for a FHA Home Loan
Email: Team@JeremyHouse.com
Phone:  602.435.2149

Change 1 – Mortgage Insurance Costs

FHA’s monthly mortgage insurance costs increase based on these changes.  While many variation of these changes exits based on different down payments, below are 2 examples of the most common scenarios.

1. 30 Year FHA Loan w/ less than 5% down
   Current FHA Annual Mortgage Insurance: 1.25%
   New FHA Annual Mortgage Insurance: 1.35%
2. 15 Year FHA Loan with less than 10% down
   Current FHA Annual Mortgage Insurance Rate: .6%
   New FHA Annual Mortgage Insurance Rate: .7%
3. 15 Year FHA Loan with less than 22% down
   Current FHA Annual Mortgage Insurance Rate: .0%
   New FHA Annual Mortgage Insurance Rate:  .45%
   

See Mortgagee Letter link above for details on additional loan scenario guidelines.  

Change 2 – Mortgage Insurance Elimination

Revision of the ability to naturally eliminate monthly mortgage insurance payments looks like this:

1. 30 Year FHA Loan with less than 10% down
   Mortgage Insurance Elimination Terms
   Current: 5 years in loan & 78% loan to value (using purch price NOT market value)   
                        New: Loan Term (it never goes away naturally/buyer must refi to Conventional)
2. 15 Year FHA Loan with less than 10% down
   Mortgage Insurance Terms
                        Current: 5 years in loan & 78% loan to value (using purch price NOT market value)  
                        New: Loan Term (it never goes away naturally/buyer must refi to Conventional)

Apply Now for a FHA Home Loan
Email: Team@JeremyHouse.com
Phone:  602.435.2149

On various other scenarios mortgage insurance will be eliminated after 11 years. Contact the HOUSE Team for more. 

FHA homeowners looking to take advantage of an FHA streamline and the “grandfathered” MI rates based on a case assignment date of May 31, 2009 they are still in luck!  These changes do not impact them.