FHA Mortgage Loans
Speak with a Union Square Mortgage professional to see if an FHA mortgage is right for you.
Overview
FHA mortgage loans assist individuals with lower-credit scores and/or lower income to purchase a home. The loan—insured by the Federal Housing Administration (FHA)—originates with an FHA-approved lender, meaning the buyer must obtain the loan from a financial institution—bank, credit union, or mortgage lender—that is FHA-approved. Union Square Mortgage is an FHA-approved lender. The Credit Union makes such loans without regards to race, color, religion, national origin, sex, handicap, or familial status.
Additional Details
Down Payment: 3.5%
Loan Term: 15-year or 30-year term
Credit Requirements: The credit score requirement is impacted by a buyer’s down payment. A 3.5% down payment requires a minimum credit score of 580. If a buyer is capable of making a 10% down payment, a minimum credit score of 500 may be accepted.
UFMIP and MIP: An upfront mortgage insurance premium (UFMIP) and an annual mortgage insurance premium (MIP) are specific insurance requirements of an FHA mortgage, regardless of the amount of down payment. They exist to protect lenders against losses that result from defaults on home mortgages.
Borrowers pay the UFMIP—1.75 percent of the base loan—once and “upfront” at closing. The premium can often be financed into the loan and paid by the lender.
The annual mortgage insurance premium (MIP) varies based on the amortization term and loan-to-value ratio. Borrows pay each year’s premium over 12 months as part of the regular, monthly mortgage payment. See MIP charts below.
2022 MIP Rates for FHA Loans Over 15 Years
If you take out a typical 30-year mortgage or anything greater than 15 years, your annual mortgage insurance premium will be as follows:
| Base Loan Amount | LTV | Annual MIP |
|---|---|---|
| ≤ $625,500 | ≤ 95% | 80 bps (0.80%) |
| ≤ $625,500 | > 95% | 85 bps (0.85%) |
| > $625,500 | ≤ 95% | 100 bps (1.00%) |
| > $625,500 | > 95% | 105 bps (1.05%) |
2022 MIP Rates for FHA Loans up to 15 Years
Homebuyers who can afford to pay off their loans quicker and opt for a shorter term, such as a 15-year mortgage, will benefit from lower mortgage insurance premiums, as follows:
| Base Loan Amount | LTV | Annual MIP |
|---|---|---|
| ≤ $625,500 | ≤ 90% | 45 bps (0.45%) |
| ≤ $625,500 | > 90% | 70 bps (0.70%) |
| > $625,500 | ≤ 78% | 45 bps (0.45%) |
| > $625,500 | 78.01 to 90% | 70 bps (0.70%) |
| > $625,500 | > 90% | 95 bps (0.95%) |
How long is MIP paid?
FHA loans with an application date of June 3, 2013 or later:
Modern FHA loans have simplified the MIP schedule. The size of one’s down payment determines when MIP expires.
| Loan Term | Original Down Payment | MIP Duration |
|---|---|---|
| All loan terms | Less than 10% | Life of loan |
| All loan terms | More than 10% | 11 years |
FHA loans with an application date before June 3, 2013:
These older FHA loans use a more elaborate MIP schedule.
| Loan Term | Original Down Payment | MIP Duration |
|---|---|---|
| 20, 25, 30 years | Less than 10% | 78% LTV after 5 years |
| 20, 25, 30 years | 10-22% | 78% LTV after 5 years |
| 20, 25, 30 years | More than 22% | 5 years |
| 15 years | Less than 10% | 78% LTV |
| 15 years | 10-22% | 78% LTV |
| 15 years | More than 22% | No MIP |
Revision to the Annual MIP Premium – as per Mortgagee Letter 2015-01
There will be no change in annual mortgage insurance premiums for all case numbers assigned on or after January 26th, 2015 for the following:
- On loans with a Loan to Value of less than or equal to 78% and with terms up to 15 years. The annual MIP for these loans will remain at 45 basis points.
- On terms ≤ 15 years and loan amounts ≤ $625,500 - If the loan to value is ≤ 90%, the Annual Premium remains the same at 45 basis points (bps). If the loan to value is >90%, the Annual Premium remains the same at 70 basis points (bps).
- On terms ≤ 15 years and loan amounts >$625,500 - If the loan to value is 78.01% - 90.00%, the Annual Premium remains the same at 70 basis points (bps). If the loan to value is >90%, the Annual Premium remains the same at 95 basis points (bps).
There will be a reduction in Annual Mortgage Insurance Premiums for all case numbers assigned on or after January 26th, 2015 for the following:
- On terms > 15 years and loan amounts ≤ $625,500 - If the loan to value is ≤ 95%, the new Annual Premium is reduced from 130 basis points (bps) to 80 basis points (bps). If the loan to value is >95%, the new Annual Premium is reduced from 135 basis points (bps) to 85 basis points (bps).
- On terms > 15 years and loan amounts >$625,500 - If the loan to value is ≤ 95%, the new Annual Premium is reduced from 150 basis points (bps) to 100 basis points (bps). If the loan to value is >95%, the new Annual Premium is reduced from 155 basis points (bps) to 105 basis points (bps).
Current UFMIP and MIP on certain streamline FHA refinance transactions:
- UFMIP is currently 1.0 percent of the base loan amount for transactions endorsed on or before May 31, 2009.
- The annual MIP is 55 bps, regardless of the base loan amount, for transactions endorsed on or before May 31, 2009 and takes effect on or after June 11, 2012.
Speak with a Union Square Mortgage professional to learn if a FHA loan is the right mortgage product for you!