FHA Decreases PMI Rates for 2017 – Lower Mortgage Payments Means Time to Buy!

FHA loans are well known for helping buyers obtain a very affordable house payment.  Well FHA, one of the most popular loan programs, just became even cheaper because HUD lowered FHA PMI rates for the 2nd time in 2 years.  The Federal Housing Administration will reduce the annual premiums most borrowers will pay by .25% – .45%.  FHA has determined that an appropriate level of reserves have been met to meet operational goals.  This sufficient level of assets therefore warrants a decrease in the amount of insurance required to offset FHA lending risk.  This reduction results from better quality of loans and less foreclosures.  So lower losses means FHA doesn’t have to charge as much insurance. 

 Basically, since FHA is doing better, borrowers benefit by having lower mortgage payments.FHA PMI decrease makes house payments smaller

A lot of lenders have dropped FHA as a lending product, but we still offer this great, affordable loan program!

Many people already know that FHA is a very flexible mortgage program offering affordable housing payments.  Benefits of FHA include allowing gifts for down payment, higher debt ratios, previous foreclosure or bankruptcy, co-borrowers that don’t have to live in the house, manufactured homes, renovation, and much more.  But don’t think of FHA just when there are some complications!  With this reduction in fees and its already aggressive interest rates, even strong credit buyers should consider the low down payment advantages of FHA.

Highlights of FHA PMI Decrease

  • Effective for FHA closings funded on 1/27/17 or after
  • Length of time MIP continues stayed the same **
  • Notice changes on 15, 20, and 30 year terms

The charts below compare the prior and now improved FHA PMI rates for varying down payment and loan amounts.  Furthermore, see where FHA loan size limits have increased as well by clicking on your state below.

New Lower FHA PMI Rates for 20 – 30 Year Terms

FHA PMI for greater than 15 year terms
Base Loan AmountDown PaymentPrevious MIPNew MIP
< $625,5004.99% or less.85.60
< $625,5005% or more.80.55
> $625,5004.99% or less1.05.60
> $625,5005% or more1.00.55

New Lower FHA PMI Rates for 10 – 15 Year Terms

FHA PMI for 15 years or less terms
Base Loan AmountDown PaymentPrevious MIPNew MIP
< $625,5009.99% or less.70.50
< $625,50010% or more.45.25
> $625,5009.99% or less.95.50
> $625,50010% – 21.99%.70.25
> $625,50022% or more.45.25

FHA Loan Size Limit Increase Benefits Home Buyers & Sellers!

Good News Keeps Coming for Home Buyers Using FHA!  Not only has FHA lowered its fees, but it has also raised its loan limits.  The minimum FHA loan limit changed from $271,050 to $275,650.  Additionally, there other changes in the higher cost counties.  This recent loan size increase allows more buyers to take advantage of FHA benefits.  Below you can view the new NC & SC FHA county limits.

FHA PMI rate decrease for 2017

FHA PMI rates decrease for 2017






** Length of Time MIP Continues Chart:  20 – 30 Years

Mortgage terms of 20 - 30 years
Down PaymentMIPDuration
Less than 5%.60Mortgage Term
5% but less than 10%.55Mortgage Term
10% or more.5511 Years

** Length of Time MIP Continues Chart:  15 or Less Years

Mortgage terms of 15 years or less
Down PaymentMIPDuration
Less than 10% .50Mortgage Term
10% or more.2511 Years

Upfront Mortgage Insurance Premiums Stayed the Same at 1.75% of the Loan Amount

Exceptions to above changes include:

  • Streamline refinance and simple refinance mortgages used to refinance a previous FHA-endorsed mortgage on or before 5/31/2009
  • Hawaiian Home Lands (Section 247)
  • Indian Lands (Section 248)

Annual Mortgage Insurance Premium (MIP)

Above applies to all mortgages except:

  • Streamline refinance and simple refinance mortgages used to refinance a previous FHA-endorsed mortgage on or before 5/31/2009
  • Hawaiian Home Lands (Section 247)

Article source is Mortgagee Letter 2017-01, Reduction of Federal Housing Administration (FHA) Annual Mortgage Insurance Premium (MIP) Rates.

Author: Russell Smith

Team Move OVM Financial loan officer success is Russell’s primary focus. He provides the tools and techniques he used as a top producing loan officer. Additionally he offers the Team Move OVM Financial Agent Training Program. Sharing is so important to Russell so he works diligently to be a resource to loan originators and Realtors.