Upcoming Changes to FHA

The Federal Housing Administration (FHA) has announced a new premium structure for FHA-insured mortgage loans that increases its annual mortgage insurance premium (MIP) by a quarter of a percentage point on all 15- and 30-year loans.  The up-front MIP will remain unchanged at 1% and will impact new loans insured by the FHA on or after April 18.  The FHA estimates that on average, new borrowers will pay approximately $30 more per month. Existing loans insured by the FHA will not be impacted by the pricing change.

Although this does not seem like a huge increase in itself, FHA has raised its annual MIP by .7%  through multiple increases since last October.  This means that your buyers could potentially qualify for less of a home after this deadline.  If you have any buyers that are using FHA-insured financing make sure they complete their application prior to April 18th.