The Federal Housing Administration has delayed for one month — at the industry's request — the implementation date for its new mortgage insurance premium structure.
The government mortgage insurance agency shifted the effective date to October 4 from September 7.
"Over the past week, the industry responded with support of the new fee structure, but voiced strong concern about having system changes ready in time to meet the original deadline," said HUD deputy assistant secretary Vicki Bott. "FHA took this feedback seriously and has accommodated the need for additional time."
Congress recently passed a bill that allows FHA to increase its annual premium up to 1.55%. The previous statutory limit was 0.55%.
With its new authority, FHA has decided to lower its 2.25% upfront premium to 1% and raise the annual premium based on loan-to-value ratios.
The annual premium for loans with LTVs up to, and including 95% will be 85 bps. The annual premium for loans with LTVs above 95% will be 90 bps.
