HUD has released Mortgagee Letter 2011-10 announcing an increase in the current Annual Mortgage Insurance Premiums (MIP or known to many as PMI) by 25 Basis Points (BPS)–which is a percentage measure equal to 0.01%– for all FHA Loans (a federally insured loan allowing people to put as low as 3.5% down to purchase a home).  Upfront MIP will not be changed.

Upfront MIP:

The upfront premium will remain at 100 BPS and will be charged for all amortization terms.  

Annual Premiums:

For FHA purchases and refinances, the annual premium has been increased.  The Annual MIP shown in basis points below is to be remitted on a monthly basis and will be charged based on the initial loan-to-value ratio and length of the mortgage according to the following schedule:

LTV	>15 Year Loan-Annual MIP		LTV	<=15 Year Loan – Annual MIP
<= 95%	110 BPS (currently 85 BPS)		<= 90%	25 BPS (currently zero)
> 95%	115 BPS (currently 90 BPS)		> 90%	50 BPS (currently 25 BPS

Effective Date: This increase in Annual Mortgage Insurance Premiums will be effective for all FHA case numbers assigned on or after April 18, 2011. 

I am not a lender, so please check with your lender for particulars on any loan programs.

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