The Federal Housing Administration this week released a new version of its reverse mortgage software to account for recent changes to the way it handles loan refinances.
Version 2.5 of the Home Equity Conversion Mortgage Calculation Software (Calculator) includes the new formula for the initial mortgage insurance premium (IMIP) for HECM-to-HECM refinances. The FHA announced the rollout in FHA INFO #18-13, issued March 21.
The updated software reflects changes introduced at the tail end of last year, when the FHA released new guidance on IMIP calculations for refinances with case numbers assigned on or after September 19, 2017. That clarification, the FHA said, brought the refinance calculation in line with requirements laid out in the HECM Final Rule, which also took effect in September.
Before the December clarification, multiple industry sources had identified a seeming mismatch between the way the rule was written and what they believed the FHA and the Department of Housing and Urban Development were attempting to accomplish with the new calculation.
Full information about the new IMIP calculation for refinances is available in the FHA Connection Release Notes issued last December.
Written by Alex Spanko