Upcoming FHA Changes and How They May Affect Your Buyers
Recently HUD announced increases in the upfront mortgage insurance premiums, along with
the monthly premiums on new FHA loans. This is a result of HUD making sure it maintains
control over the financial stability of the FHA loan program overall.
The change will be for case numbers assigned starting April 9, 2012. Case numbers are only
assigned when initial loan applications are complete and received at the Operations Center of
the lender. This means that anyone wanting to ensure they apply under the lower current
mortgage insurance premiums needs to make application (and submit documentation) no later
than the beginning of the first week of April.
Traditional Purchase 30-Year Fixed Rate FHA Loans
(Effective for case numbers ordered on or after April 9, 2012)
Base Loan Amount
LTV Effective Date Annual MIP UFMIP
≤ 95.00% April 9, 2012 1.20% 1.75%
> 95.00% April 9, 2012 1.25% 1.75%
How will this affect your buyer?
$200,000 Sales Price @ 4% fixed rate for 30 years with 3.5% down (96.5% financing)
Your Allen Tate Mortgage Consultant will consult with your buyer to see what program is best
for them. For buyers with good credit scores and 5% down of their own funds (which can be
verified), traditional mortgage insurance with a conventional loan may offer a better solution.
We are still waiting to hear about an effective date on the change in seller concessions for FHA
from 6% to 3%, and we will update you as soon as we have that information