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Following up on last week's announcement that the Federal Housing Administration (FHA) will soon cut its annual mortgage insurance premium by half a percentage point, HUD has issued an update regarding FHA loans currently in process.
In a mortgagee letter issued Friday, HUD announced that the reduction in annual premiums—which will bring premiums down to 0.85 percent on most FHA loans—will affect mortgages with case numbers assigned on or after January 26.
To make sure borrowers with FHA applications currently in process don't get left out, FHA says it will temporarily approve cancellation requests for active case numbers starting January 15 and through the end of the day (11:59 p.m. EST) February 26.
Cancellation requests that include more than one case number must be submitted to FHA via email at [email protected]. The email must have the subject line "MIP REDUCTION CANCELLATION—ML 2015-01" and include an Excel attachment featuring the request data, FHA said. Details for setting up the email and spreadsheet are here.
The agency also issued instructions for logging appraisals on canceled case numbers: Lenders will be required to certify in the FHA Connection Appraisal Logging screen that the number was canceled and indicate in the user certification section that the case meets certification criteria.
More information on the temporary cancellation announcement and on the premium reduction can be found on HUD's website.
