The upfront MIP is determined by multiplying the base loan amount by the Upfront Premium factor.
• The annual MIP is determined by multiplying the base loan amount by the appropriate Annual Premium factor. Since the Annual MIP is collected in monthly installments, divide the resulting number by 12 to obtain the monthly premium. This figure is included in the proposed monthly housing expense and qualifying ratios.
• Upfront MIP Factor: 1.50%
• Annual MIP Factor:
• .500% for all loans with a mortgage term >15 years.
• .250% for all loans with a mortgage term of <=15 years and an LTV of 90% and up
• There will be no Annual MIP for loans with mortgage terms of 15 year or less and LTV’sof 89.99% and under.
• For mortgages >15 years, the annual MIP will be canceled when the LTV reaches 78%, provided the borrower has paid the annual MIP for at least 5 years.
• For mortgages <=15 years, the annual MIP will be canceled when the LTV reaches 78%.
Streamline Refinances
• Streamline refinances of mortgages closed before July 1, 1991 are subject to an Upfront MIP of 1.50%, but are not subject to the annual premium.
• Streamline refinances of mortgages closed on or after July 1, 1991, are subject to the 1.50% Upfront MIP plus the appropriate Annual MIP.
• The LTV on streamline refinances without an appraisal will be based on data regarding the mortgage being refinanced, including sales price and appraised value amounts residing in FHA’s Single Family Insurance System (SFIS). FHA will compute a new LTV by dividing the new loan amount, exclusive of any upfront MIP, by the lower of the sales price or appraised value amount. From this computed LTV, FHA will determine the 78% threshold is reached
based on the scheduled amortization. If the computed LTV is not possible, due to missing data or previous refinancing without an appraisal, the new LTV will default 89.9 percent.
• Cash-out refinances with a term of 30 years are subject to the 1.50% UFMIP and the .50%annual premium. For a 15-year term the UFMIP is 1.50% with no annual premium since the maximum LTV is 85%.
Does the servicer have the opportunity to pay MI on an FHA loan quarterly, semi-annual, or annually, or are they required to make monthly payments?
Unfortunately, the only way that FHA allows for the PMI to be paid is on a monthly basis. The servicer has absolutely no opnions in the matter. The good news is that after 5 years, if you have made your payments on time, the PMI goes away regardless of the current value of your home.