Update – San Diego FHA Home Loans Will Undergo Big Changes

In an article I posted last week, titled “San Diego FHA Home Loans Will Undergo Big Changes Soon”, I talked about a number of changes that HUD recently announced regarding their FHA program.  That announcement though, did not have any implementation dates and was week on specifics.

In Mortgage Letter 2013-04 released on Monday, HUD announced the dates that San Diego FHA Home Loans would be affected and additional details.  We learned that effective with case numbers assigned on and after April 1, 2013 (see table below) FHA will be:

  • Increasing the annual MIP on all forward mortgages except single family refinance transactions that refinance FHA loans endorsed on or before May 31, 2009 (See details on special San Diego FHA streamline program).

For San Diego FHA Home Loans with case numbers assigned on or after June 3, 2013, FHA will be making the following changes (see tables below):

  • Revising the period for assessing the annual MIP;
  • Removing the exemption from annual MIP for loans with terms of 15 years or less and Loan to Value (LTV) of 78% or lower; and
  • Increasing the annual MIP for mortgages with terms less than or equal to 15 years and LTV ratios less than or equal to 78 percent at origination.
  • For all mortgages regardless of their terms, with an LTV of 90% or less, the annual MIP will be assessed until the end of the mortgage term or for the first 11 years of the mortgage term, whichever occurs first.
  • For any mortgage with an LTV greater than 90%, FHA will assess the annual MIP until the end of the mortgage term or for the first 30 years of the term, whichever occurs first.

FHA Calculates LTV as a percentage by dividing the base loan amount (prior to the financed up-front mortgage insurance premium) by the lesser of the purchase price or appraised value. For San Diego FHA streamline refinance loans without an appraisal, FHA uses the original appraised value of the property.

I have included several tables below which shows the changes mentioned above:

Mortgage Insurance rates effective with case numbers assigned on and after April 1,2013:San Diego FHA Loans New Annual MIP

Duration of the annual MIP by amortization term and LTV (previous and new):

New San Diego FHA Loan MIP Term

Mortgage Insurance rates effective for loans with LTV < 78% and term up to 15 years,
effective with case numbers assigned on and after June 3, 2013:

New San Diego FHA Loans Annual MIP for 15 Year Fixed

San Diego Mortgage Brokers have been aware that changes were coming and we have been telling clients who wanted to take  advantage of the low San Diego mortgage rates and use an FHA loan to do so sooner than later.  There still are a few months to take action under the old guidelines.  Please give me a call if you would like specifics on your situation or request an interest rate quote Here.

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