Yep…another bi-product of HR 3221, The Housing and Economic Recovery Act of 2008. We don’t have the final figures yet…this should be coming out any time from HUD. The ceiling for FHA’s upfront mortgage insurance will increase after October 1, 2008 from 2.25% to 3% for 30 year fixed programs.
Currently FHA’s mortgage insurance is risk based (tiered based on credit score and loan to value). This will be put on hold beginning October 1, 2008 through September 30, 2009. During this time, FHA’s mortgage insurance will be a flat fee.
I will update you as soon as information becomes available. HUD should be issuing a Mortgagee Letter with the final rules in the next 30 days.
Other posts regarding HR 3221: