New PMI regulations

[LizzieK]

I know that HUD made some changes regarding PMI on FHA mortgages - but they are very confusing. Here is my scenario:

I owned a home that foreclosed more than 3 years ago. I applied for and was approved for an FHA loan in February. We are puttingn 20% (can put down more to avoid PMI). My loan officer told me we had to pay PMI for 5 years (significantly increasing our monthly payment). I just read the June 13th changes to FHA regulations and my interpretation is that if you have a down payment of more than 10% on a 30 year loan, there is no PMI. Is this correct or incorrect? Thanks for any conclusive answers!

 

[Cat Damiano]

I know that HUD made some changes regarding PMI on FHA mortgages - but they are very confusing. Here is my scenario:

I owned a home that foreclosed more than 3 years ago. I applied for and was approved for an FHA loan in February. We are puttingn 20% (can put down more to avoid PMI). My loan officer told me we had to pay PMI for 5 years (significantly increasing our monthly payment). I just read the June 13th changes to FHA regulations and my interpretation is that if you have a down payment of more than 10% on a 30 year loan, there is no PMI. Is this correct or incorrect? Thanks for any conclusive answers!

It is the MI that goes with the FHA loans, PMI is on Conventional loans, and the changes were posted by Erik Sandstrom in the following thread, if you have questions on any new changes, you may want to post a question asking Erik in that thread;

http://www.loansafe.org/forum/fha-loans-requirements-rates/76756-recent-fha-changes-effective-april-1st-2013-a.html

 

[Jon Maddux]

Hello Lizzie!

Well as of April 1st 2013, you cannot avoid MI any longer no matter what your downpayment is. So all new 30 year fixed FHA mortgages have MI for at least 11 years. If you put down 10 percent or more then you would have 11 years of MI. If you put less than 10 percent down, you would have MI for the full term of the loan. Prior to this change the only time you could avoid MI on an FHA loan would be on a 15 year term with 22 percent down. Not sure where they got their info from but those are the facts. Here is the link to the HUD Mortgagee letter: http://portal.hud.gov/hudportal/documents/huddoc?id=13-04ml.pdf

Also here is the table for reference: