FHA Loan Changes...coming SOON!!! • Phoenix Metro Area Real Estate

Increase to Annual Mortgage Insurance Premium

On December 23, 2011, the President signed into law the Temporary Payroll Tax Cut

Continuation Act of 2011 (Public Law 112-78), which requires FHA to increase the Annual

MIP it collects by 10 basis points (bps). This change is effective for case numbers assigned

on or after April 9, 2012.

The FHA upfront mortgage insurance premium will increase to 1.75% from 1% of the base
home loan amount. This will apply regardless of the term or loan-to-value ratio.
The annual mortgage insurance premium on a 3.5% Down, will increase by 10 basis points from 1.15 to 1.25.

How will this affect a borrower?

Example: On a purchase price of $150,000, with 3.5% down,

the payment will increase $17.20.

From $835.58 to $852.78*

*Example is principal, interest and MI only @ 4% interest rate.

Coming Soon

FHA to reduce allowable seller concessions from 6% to 3%.

This change will be posted in the Federal Register in February, and after a notice and

comment period, would go into effect in the early summer.

FHA Loan Changes…coming SOON!!!