Federal Housing Administration lending has been treading water for most of this year and it appears a recent hike in the FHA annual premium had little impact on May endorsements.
The monthly "FHA Single-Family Outlook" report released Monday shows FHA endorsed $16.9 billion in single-family loans in May, basically unchanged from $16.8 billion in April.
FHA hiked its annual mortgage insurance premium by 25 basis points on April 18 -- following a 25 bp hike back in October.
The agency raised the premiums to rebuild its capital quicker and make private mortgage insurance more competitive in the marketplace.
FHA now charges a 115 bp annual premium on 30-year fixed-rate mortgages with a loan-to-value ratio greater than 95%.
Homebuyers also pay a 90 bp upfront premium on these standard FHA loans.
Meanwhile, there has been a sharp drop off in conventional and FHA originations from the fourth to the first quarter. The second quarter is getting a lift from another surge in refinancings but FHA's bread and butter is purchase mortgages. In May, only 25% of FHA's loan production involved refinancings.
Based on dollar amount, FHA lending is down 22% in fiscal year 2011, compared to the first eight months of the previous fiscal year.
FHA has insured $168.5 billion in single-family loans so far, down from $216.3 billion during the same period in FY 2010.
