Exceptions to the FHA Mortgage Insurance Payment Eligibility Date Rule: A Reader Question | FHA News

Exceptions to the FHA Mortgage Insurance Payment Eligibility Date Rule: A Reader Question | FHA News

iStock 000010824343XSmall 300x199 Exceptions to the FHA Mortgage Insurance Payment Eligibility Date Rule: A Reader Question | FHA News

“For all SF Forward Streamline Refinance transactions that are refinancing FHA loans endorsed on or before May 31, 2009, the Annual MIP will be 55 bps, regardless of the base loan amount. The endorsement date is on the Case Query screen in FHA Connection. This change is effective for case numbers assigned on or after June 11, 2012.”

Additionally, the same document describes further changes to the up front mortgage insurance payments for these same loans:

“For all SF Forward Streamline Refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009, the UFMIP will decrease from 1 percent to 0.01 percent of the base loan amount. The endorsement date is on the Case Query screen in FHA Connection. This change is effective for case numbers assigned on or after June 11, 2012.”

Since we reported those changes, many FHA borrowers have written asking us, “Will the FHA make any exceptions to the 05/31/09 eligibility date set forth in ML 12-4 for lower MIP and/or UFMIP?”

Since the publication of Mortgagee Letter 2012-4, the FHA has issued an answer to this question, simply stating:

“No. There are no exceptions to the May 31, 2009 eligibility date.”

To clarify, the FHA reports on its official site, “Mortgagee Letter 2012-4 set out a lower Up-Front Mortgage Insurance Premium (MIP) and a lower Annual MIP for the refinancing of FHA-insured mortgages which FHA endorsed on or before May 31, 2009. FHA uses the endorsement date instead of the closing date because the endorsement date is when FHA becomes liable for the payment of a claim on a mortgage it insures.

The May 31, 2009 eligibility date for lower Up-Front and Annual MIP aligns the FHA refinancing program with the Home Affordable Refinance Program, which is the Department of the Treasury’s program for refinancing mortgages which are not insured by FHA, but are owned or guaranteed by Freddie Mac or Fannie Mae.”

Borrowers should take note of this–the FHA has issued clear guidance. Unless your home loan meets the criteria mentioned in the mortgagee letter, it will not be eligible for the reduced MIP and UFMIP under the program described here.