On February 22nd the Department of Housing and Urban Development (HUD), through the Federal Housing Administration (FHA), announced a 30 basis point reduction to the annual mortgage insurance premiums (annual MIP) charged to homebuyers who obtain an FHA-insured mortgage. The reduction of the premium from 0.85 percent to 0.55 percent is intended to make homeownership more affordable and accessible for more potential homebuyers.
The upfront MIP rate of 1.75% remains unchanged but the 30 basis point annual MIP reduction will apply to almost all Single Family Title II forward mortgages insured by FHA. Further, the reduction applies to all eligible property types, including single family homes, condominiums, and manufactured homes, all eligible loan-to-value ratios, and all eligible base loan amounts.
The annual mortgage insurance premium reductions are noted in the table below and are effective for mortgages endorsed for insurance by FHA on or after March 20, 2023.
* Source - HUD No. 23-041 Press Release
As of March 10th, lenders using QuickQual will have the ability to update any of their loan scenarios to utilize the new FHA Monthly MIP rate and all new QuickQuals with a FHA scenario will default to the new 0.55 rate.
This update will help lenders show their borrowers how the updated rate will lead to lower monthly payments. Empowering home buyers (and their real estate agents) with up to date information creates more confident and assertive shoppers and can increase the goal of expanding home ownership.
These changes to QuickQual along with the LenderLogix CRA Analytics platform are just a few of the ways LenderLogix is empowering mortgage lenders continue to make progress lending in communities where there are opportunities to grow the percentage of home ownership.