As part of the effort to strengthen the FHA’s capital reserves, the Federal Housing Administration will be raising its annual mortgage insurance premium. The change to the MIP will be an increase of a quarter of a percentage point, with the upfront MIP remaining the same at 1%.
FHA loans represent about half of the loans being done today, and they will continue to be a great option for buyers who may have little money to put down on a home purchase or who may have a lower credit score. This change will take place on April 18, 2011, and it will affect all new FHA loans. Existing loans will not be affected by this change.
The Federal Housing Administration became a part of HUD in 1965. All FHA mortgages require mortgage insurance, both upfront and monthly. These loans are not just for first-time home buyers, and, although there may be property condition requirements on your home purchase, you can still get these loans with only 3.5% down. And there is a great FHA loan (203(K)) that allows you to finance up to an additional $35,000 for repairs and improvements. Call or email me for details and for more information on an FHA loan program for you!