Increase in Upfront Premiums for FHA Mortgage Insurance

Effective for FHA loans for which the case number is assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent. This policy change will increase premiums for purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit qualifying streamlined refinance transactions.

Programs Covered by Insurance Premiums Shown Below

The upfront and annual premiums and the requirements described in this Mortgagee Letter apply to all mortgages insured under FHA’s Single Family Insurance Programs except those listed below:

- Title I

- Home Equity Conversion Mortgages (HECMs)

- Hope for Homeowners (H4H)

- Section 247 (Hawaiian Homelands)

- Section 248 (Indian Reservations),

- Section 223(e) (declining neighborhoods)

- Section 238(c) (Military Impact areas in Georgia and New York)

Upfront Premiums

FHA will charge an upfront premium in an amount equal to the following percentages of the mortgage:

Purchase Money Mortgages and Full-Credit Qualifying Refinances = 2.25 percent

Streamline Refinances (all types) = 2.25 percent

HOPE for Homeowners (Delinquent Mortgagors) = 2.00 percent

Home Equity Conversion Mortgages = 2.00 percent

Annual Premiums

Annual premiums will not change at this time.

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