New FHA Risk Premium

FHA New Risk MI Premiums

The new UFMIP - Up Front Mortgage Insurance Premiums will range from 1.25% of the loan amount for lower risk borrowers to 2.25% for higher risk borrowers. The Annual Mortgage Insurance Premiums will be range from 0.50% to 0.55%. No borrower who qualifies for a FHA insured mortgage loan will pay more than 2.25% in UFMIP - Upfront Mortgage Insurance Premiums, and pay 0.55% in the Annual Mortgage Insurance Premium. First time home buyers with HUD approved counseling will only have to pay 2.00% for the UFMIP.

Borrowers without FICO scores may still be eligible, but will need to have their FHA loan manually underwritten according to HUD’s criteria as described in Mortgagee Letter 2008-11.

FHA Single Family Mortgage Insurance
Upfront and Annual Mortgage Insurance Premiums
Loan Terms > 15 Years
All premiums are specified in basis points (0.01%)

FICO Score 850-600 599-560 559-300 No Score
LTV>90% 1.25/50 1.50/50 1.75/50 1.50/50

FICO Score 850-640 639-600 599-560 559-500 No Score
LTV90.01- 1.25/50 1.50/50 1.75/50 2.00/50 1.75/50
95.00%

FICO Score 850-680 679-640 639-600 599-560 559-500 No Score
LTV >95% 1.25/55 1.50/55 1.75/55 2.00/55 2.25/55 2.00/55

If a FICO score is available, it must be used to determine the decision FICO score for the application, and the FHA premium to be charged. A “decision FICO score” is determined for each applicant according to the following rule: when three FICO scores are available (one from each credit repository), the median (middle) score is used; when only two scores are available, then the lesser of the two is chosen; when only one score is available, then the middle is used.

For Multiple Borrowers - if more than one individual is applying for the same FHA mortgage, the FHA lender must determine the decision FICO score for each individual borrower, and then select the lower (or lowest if more than two borrowers). That “decision FICO score” is then used to determine the appropriate FHA insurance premium in conjunction with the loan to value ratio.

For Multiple Borrowers/One Without a FICO Score - the borrower representing the greatest risk to the Department will determine the premium charged. For example, if the decision FICO score for one borrower is between 559-500, and the other borrower is in the non-traditional (No Score) credit category, the decision FICO score between 559-500 is used to determine the FHA premium. However, if the decision FICO score for one borrower is between 639-600, and the other borrower is in the non-traditional credit category, the non-traditional credit category is used to determine the FHA premium. FHA mortgage rates will be subject to your FICO.