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HUD issues Mortgagee Letter on risk-based premiums for FHA mortgage insuranceMortgagePress.comHUD, Mortgagee Letter, FHA, mortgage insurance, ML 08-16
On June 11, the Department of Housing and Urban Development
(HUD) issued Mortgagee Letter 2008-16 (ML 08-16), which addresses
risk-based premiums for Federal Housing Administration (FHA)
mortgage insurance.
On July 14, 2008, the FHA will implement risk-based premiums on
one- to four-unit single family mortgages. ML 08-16 states that the
premium will be based solely on the prospective borrower's credit
bureau score and the loan-to-value ratio. The upfront mortgage
insurance premium will range, for loan terms greater than 15 years,
from 1.25 percent of the loan amount for lower-risk borrowers to
2.25 percent for riskier borrowers. ML 08-16 provides matrices that
establish the mortgage insurance premiums for FHA single-family
mortgages for borrowers with varying degrees of risk. For borrowers
refinancing delinquent non-FHA adjustable rate mortgages, the
upfront mortgage insurance premium is set at 2.25 percent of the
base loan amount regardless of the loan to value ratio.
For a copy of the Mortgagee Letter, click
here.
For more information, visit www.hud.gov.
