ML 2017-01: Reduction of Federal Housing Administration (FHA) Annual Mortgage Insurance Premium (MIP) Rates (01/09/17)

© HUD Single Family Housing Policy Handbook 4000.1

Purpose

This Mortgagee Letter (ML) communicates revised annual MIP rates for certain FHA Title II forward mortgages.

Effective Date

This ML is effective for endorsement of mortgages with a Closing/Disbursement date on or after January 27, 2017. Closing/Disbursement date refers to the later of the date of the signing of the Mortgage, or the date of disbursement of the loan proceeds, as is entered in FHA Connection.

Affected Programs

This guidance applies to all FHA Title II forward mortgage programs except for mortgages insured under National Housing Act section 247 (Hawaiian Homelands.)

Affected Topics

This guidance will affect Appendix 1.0 - Mortgage Insurance Premiums of the FHA Single Family Housing Policy Handbook 4000.1, and will delete the reference to Base Loan Amount in Section II.A.2.e.ii.

Background

Pursuant to its statutory mandate, FHA continuously strives to achieve the appropriate balance between meeting the housing needs of the borrowers that FHA's mortgage insurance programs were created to serve, and also the requirement of minimizing the level of risk to the Mutual Mortgage Insurance Fund undertaken relative to the insurance of those mortgages. FHA has determined that the appropriate balance of its statutory operational goals now requires a reduction of the rate of annual MIP charged pursuant to Section 203(c)(2)(B) of the National Housing Act (NHA). As provided in this ML, the total annual MIP charged pursuant to NHA sections 203(c)(2)(B) and (C) for most Title II Single Family forward mortgages has been revised.

Summary of Changes

The following tables show the existing and the new annual MIP rates. With this revision to the annual MIP rates for FHA Title II forward mortgages, FHA is eliminating the distinction in rates based upon the base loan amount.

Summary of Changes

Mortgage Insurance Premiums, Appendix 1.0

The revisions to the mortgage insurance premium rates as shown in Appendix 1.0 attached to this ML will be incorporated into a future publication of the FHA Single Family Housing Policy Handbook 4000.1.

Information Collection

The information collection requirements contained in this document have been approved by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) and assigned OMB control number 2502-0059 and OMB Control number 2502-0538. In accordance with the Paperwork Reduction Act, HUD may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection displays a currently valid OMB control number.

Questions

Please address any questions about the topics addressed in this Mortgagee Letter to the FHA Resource Center at (800) 225-5342. Persons with hearing or speech impairments may reach this number via TTY by calling the Federal Relay Service at (800) 877-8339. For additional information on this Mortgagee Letter, please visit www.hud.gov/answers.

Signature

Edward L. Golding
Principal Deputy Assistant Secretary for Housing

Attachment