HUD Announces Changes to FHA
On January 30, 2013, the Federal Housing Administration’s (FHA) Commissioner Carol Galante announced a series of changes to be issued this week that manage risk and further strengthen the heath of FHA’s Mutual Mortgage Insurance Fund (MMI Fund). Highlights of some of these changes are below. For more information, click here.—Consolidation of the Standard Fixed-Rate Home Equity Conversion Mortgage (HECM) and Saver Fixed Rate HECM pricing options.
—The annual mortgage insurance premium (MIP) for most new mortgages will increase by 10 basis points, or by 0.10 percent. Premiums on jumbo mortgages ($625,000 or larger) will increase by 5 basis points, or 0.05 percent. These premium increases exclude certain streamline refinance transactions.
—FHA will require most FHA borrowers to continue paying annual premiums for the life of their mortgage loan.
—Downpayment requirements for mortgages with original principle balances above $625,500 will be raised from 3.5% to 5%.