FHA to require PMI for life of loan

If you have clients thinking about an FHA loan, you should tell them to act quickly. Not only is FHA going to be raising the cost of its required mortgage insurance, it’s also going to require that the insurance be kept for the life of the loan.

Today, once a home’s loan-to-value gets below 78%, mortgage insurance isn’t required; that takes 10 years or so. A homeowner will typically pay several hundred dollars a month for mortgage insurance — a cost that, soon, won’t go away.

When will this happen? FHA hasn’t said, only that it will happen.

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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7 Responses to FHA to require PMI for life of loan

  1. CIndy Jones says:

    I would hope FHA would rethink this proposed change. Taking out the bad loans of the past on the homeowner of the future is not a way to run a business.

  2. Debbie Shickel says:

    I would hope that FHA rethinks this. It will hurt buyers who need to use an FHA loan. Why should new loan applicants be penalized and have to pay PMI for the life of the loan?

  3. Jeanette G Newton says:

    I there any possibility that this could be retroactive, or will it only apply to new loans. Eitherway it is bad, but inquiring minds need to know.

  4. Nouman Mirza says:

    Is there a source for this? I haven’t been able to find anything else except this post on this topic.

  5. Rebecca Bulkeley says:

    With an agency so deeply in debt, the agency no longer can serve the best interest of the public and needs to find ways to pay its debt. What a shame to see FHA’s actions on implementing a policy of PMI for the life of the loan and the impact this action will have on the dream of owning a home.

  6. John London says:

    When did FHA start calling their insurance premium PMI? Conventional loans have PMI or private mortgage insurance and FHA loans have MIP or mortgage insurance premium. Thanks

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