FHA Reduces Annual Mortgage Insurance Premiums
According to a February 22, 2023 HOUSING ALERT by Manufactured Housing Institute (MHI)), the Federal Housing Administration (FHA) announced it is reducing its annual mortgage insurance premium (MIP) for FHA-insured Single Family Title II mortgages by 0.30 percentage points, from 0.85% to 0.55% for most new borrowers. Although the premiums differ for some borrowers based on LTV and whether the loan is above $726,200. In fiscal year 2021, 41,490 manufactured home loans were financed through FHA’s Title II program which encompasses manufactured homes where the home and land are purchased together.
MHI joined with leading housing associations including the National Association of Realtors, the National Association of Home Builders and the Mortgage Bankers Association calling on FHA to reduce the annual MIP for borrowers with FHA insured loans. Arguing the combination of higher home prices and mortgage rates has put severe stress on prospective low-to-moderate income and first time homebuyers, the groups stressed that by lowering lowering the MIP it will increase homebuyer’a purchasing power by reducing monthly payments and directly putting money into their pockets every month, giving them the opportunity to become homeowners and build generational wealth.
The mortgage insurance premium (MIP) is the monthly fee that homeowners with FHA-insured mortgages pay to insure their mortgages, which they pay on top of their monthly principal and interest payments. For millions of borrowers, including those buying manufactured homes, mortgage insurance helps bridge the down payment gap for buyers lacking a 20 percent down payment or those with less than perfect credit, and supports access to affordable and sustainable homeownership for American families.