Congress approves FHA loan costs to adjust on 9/7/10
Congress has taken quick action and passed H.R. 5981. This bill gives FHA the authority to adjust its annual mortgage insurance premium and adjust the monthly mortgage premium. As of September 7, 2010-any new FHA loans (where case #’s are ordered on or after this date), the costs will adjust. The monthly Mortgage Insurance Premium will go from 2.25% to 1%, a 1.25% decrease. The monthly PMI will go from .55% to .85% to .95% (for loans with terms of 15 years or more, LTV’s <= 95% will increase to 85bps and LTV > 95% will increase to 90 bps).
The reason for the change will allow the FHA fund to yield approximately $300 million per month in value to the FHA Mutual Mortgage Insurance Fund at a time when its reserves are perilously low. With this authority, FHA is in a better position to address the increased demands of the marketplace and return the MMI fund to congressionally mandated levels without disruption to the housing market.
Feel free to call or email me to go over all the different loan options you have! The market place is ever changing; I’m here to help you through it, 262-696-5041 or krissteinbach@inlanta.com
