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Longer Mortgage Insurance To Be Required on FHA loans, beginning June 3rd

May 7, 2013
From Loan Officer John Hendley

From Loan Officer John Hendley

In less than 30 days, the cost of an FHA mortgage will become more expensive for the vast number of borrowers who choose them for a competitive interest rate, relaxed underwriting, and low down payment requirements.


For all FHA case numbers on June 3, 2013 and later, the annual MIP cancellation policies will change dramatically and make an FHA loan more expensive for every borrower, regardless of the term of the loan or amount of the downpayment.

  • All FHA loans will require MIP, regardless of the loan’s loan-to-value or loan term. The difference for homeowners after June 3, 2013, is how long they must pay the MIP.
  • FHA loans that are 90% LTV or greater =  MIP for the life of the loan. It’s perpetual, with no options for canceling the MIP other than refinancing to a new conventional mortgage.

    FHA loans of less than 90% LTV = MIP for 11 years regardless of their equity position. There are no exceptions that will reduce this time period other than refinancing into a traditional, non-FHA mortgage.


This is a huge change to the FHA MIP policy, so it’s vital to let your homebuyers know this week that they must secure an FHA case number before June 3, 2013, to avoid these more costly MIP requirements.

It’s imperative to partner with a lender who is adept at working with FHA, particularly in a time like this where mistakes will be much more than just frustrating, but extremely costly for a homeowner.


Shelter Mortgage has highly knowledgeable loan officers who understand FHA inside and out and who would be happy to walk you through the upcoming changes in more detail.

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