Revision to FHA’s Annual MI Structure

Written By: Stacey Sprain

If you blinked you probably missed it but HUD recently issued another major change in the body of an outgoing email from Jerrold Mayer’s email subscription list.

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The following message was included in an email from Jerrold Mayer at HUD that arrived on Friday, April 15th:

This message is to inform lenders that HUD’s Single Family Premium Collection System (SFPCS) will not bill for Annual MIP on a mortgage with:

• a term of 15 years or less, AND
• a loan-to-value ratio (LTV) at or below 78 percent at the time of origination.

For example, if a lender closes a mortgage with a 15 year term at 78 percent LTV, SFPCS will not bill for the Annual MIP for that mortgage.

A mortgagee letter will be issued informing lenders that Annual MIP is not applicable for mortgages with terms of 15 years or less where the LTV at the time of origination is at or below 78 percent.

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Though HUD mentions that a Mortgagee Letter will be issued, as of the date of this writing near Mid-May, no Mortgagee Letter has yet been published. However, since HUD’s communication states that their systems don’t even allow the charging of annual MI on an LTV of less than 79%, it makes sense for lenders to update their records and communicate this revision effectively immediately.

With this announced change, the updated MIP/MI chart looks like this:

Annual MI Premiums for Case Assigned on and after 04/18/2011 perMortgagee Letter 2011-10:

> 15 yr Term: > 95% LTV = 1.15% <=95% LTV = 1.10%
< = 15 yr Term: > 90% LTV = .50% >=79% LTV = .25%

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Up-Front MI Premium for Case Assigned on and after 10/04/2010: MIP = 1.00% per Mortgagee Letter 2010-28

About The Author

Stacey Sprain - As an NAMP® staff writer, Ms. Stacey Sprain is currently a NAMP® member in good standing, and is a NAMP® Certified Ambassador Loan Processor (NAMP®-CALP). With over 15+ years of mortgage banking experience, Stacey is also a Quality Control Manager for a major mortgage lending institution. If you would like to become a volunteer writer for us, please email us at:


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