The Department of Housing and Urban Development (HUD) is suspending previous guidance that permitted a reduction of annual mortgage insurance premium rates for certain Federal Housing Administration (FHA) mortgages, the agency announced via Mortgagee Letter 2017-07 published Friday.
Effective immediately, Mortgagee Letter 2017-07 supersedes guidance published earlier this month that reduced the annual MIP by 25 basis points for FHA Title II forward mortgages with a closing/disbursement date on or after January 27, 2017.
“FHA is committed to ensuring its mortgage insurance programs remains viable and effective in the long term for all parties involved, especially our taxpayers,” states ML 2017-07. “As such, more analysis and research are deemed necessary to assess future adjustments while also considering potential market conditions in an ever-changing global economy that could impact our efforts.”
The move arrives one week after HUD first announced the reduction, and just hours after President Donald Trump was sworn into the U.S. Presidency on Friday, January 20.
While Trump nominee for HUD Secretary Ben Carson has not yet been confirmed into this position, during a nomination hearing last week Carson said he would take a look at current housing policies, including the MIP reduction that was first announced just days before he appeared before the Senate Committee on Banking, Housing and Urban Affairs.
“Certainly, if confirmed, I’m going to work with the FHA administrator and other financial experts to really examine that policy,” Carson said during the hearing.
FHA plans to issue a subsequent Mortgagee Letter at a later date should this policy change.
Written by Jason Oliva