The Future of FHA Mortgage Insurance Premiums

Blog posted On October 19, 2017

Mortgage Insurance Premium (MIP) is the insurance policy associated with FHA loans.  FHA borrowers have the option to pay the total cost of mortgage insurance at the time of closing with an “upfront” MIP (UFMIP) or pay annually through the entire duration of the loan.  In January, the outgoing Obama administration lowered MIP nationally to help lower payments for FHA borrowers.  Shortly after, the decision was reversed by the incoming Trump administration.  Since the reduction was suspended, the issue has not yet been revisited.

Representative Joyce Beatty (D-Ohio), with 20 other members of Congress, sent a letter to Department of Housing and Urban Development (HUD) Secretary Ben Carson discussing the MIP cuts.  During Secretary Carson’s hearing before the Financial Services Committee, Representative Beatty brought up the letter and questioned why a HUD staffer had responded instead of the HUD Secretary himself.   

Representative Beatty explained the letter, “was requesting that you follow through on your predecessor’s decision to lower these annual premiums, citing the fiscal strength of the fund and histrionically low homeownership.”

Secretary Carson offered to answer the question during the hearing and Representative Beatty declined, citing other questions in the letter that require answers.  Housing reform and housing-related legislation have taken a backseat to other issues this year.  Stalled healthcare and tax reform are taking precedence and housing discussion will likely carry over into 2018.

Sources: HousingWire