www.hudclips.org 


U. S. Department of Housing and Urban Development
Washington, D.C. 20410-8000

March 31, 1994
OFFICE OF THE ASSISTANT SECRETARY
FOR HOUSING-FEDERAL HOUSING COMMISSIONER
MORTGAGEE LETTER 94-14
     TO:  ALL APPROVED MORTGAGEES
     SUBJECT:  Single Family Loan Production - Reduced Upfront Mortgage
                 Insurance Premium (UFMIP)
 
          Based upon recent actuarial data and other considerations, the
     Department has determined that it can now lower the upfront mortgage
     insurance premium (UFMIP) for mortgages with terms greater than 15
     years from the current 3 percent to 2.25 percent.  This reduction is
     effective for mortgages closed on or after April 17, 1994.  The
     complete schedule of UFMIP and annual MIP is contained on the
     accompanying charts.
 
          Mortgages insured under the following Sections of the National
     Housing Act are affected by this revision to the mortgage insurance
     premium schedule:  203(b), Home Mortgage Insurance; 203(h), Mortgage
     Insurance for Disaster Victims; 203(i), Home Mortgage in Outlying
     Areas; 203(n), Single Family Cooperative Program; 245(a), GPMs and
     GEMs (except on condominiums); 251, Adjustable Rate Mortgages (except
     on condominiums); 244, Coinsurance.
 
          If you have any questions concerning this Mortgagee Letter,
     please contact your local HUD Office.
 
Sincerely yours,
 

Nicolas P. Retsinas
Assistant Secretary for Housing
- Federal Housing Commissioner
 
     Attachment
 
_____________________________________________________________________
 
                    UPFRONT AND ANNUAL MIP RATES
          FOR MORTGAGES CLOSED ON OR AFTER APRIL 17, 1994
 
          __________________________________________________
 
                    UPFRONT AND ANNUAL MIP PREMIUM CHART
                     MORTGAGE TERM MORE THAN 15 YEARS*
 
                                   Annual
 
               Upfront   L-T-V Ratio       Premium   Years
               =============================================
               2.25%     89.99 & Under       .50%       7
 
               2.25%     90.00-95.00         .50%      12
 
               2.25%     95.01 & Over        .50%      30
               =============================================
 
     *    Streamline refinances of mortgages closed before July 1, 1991,
          where the new mortgage will carry a term greater than 15 years,
          are subject to an Upfront MIP of 3.8 percent, but are not
          subject to the annual premium.
 
          __________________________________________________
 
          __________________________________________________
 
                    UPFRONT AND ANNUAL MIP PREMIUM CHART
                         MORTGAGE TERM 15 YEARS OR LESS*
 
                                   Annual
 
               Upfront   L-T-V Ratio       Premium   Years
               =============================================
 
               2.00%     89.99 & Under       None      n/a
 
               2.00%     90.00 - 95.00       .25%       4
 
               2.00%     95.01 & Over        .25%       8
               =============================================
 
     *    Streamline refinances of mortgages closed before July 1, 1991,
          where the new mortgage will carry a term of 15 years or less, are
          subject to an Upfront MIP of 2.4 percent, but are not subject to
          the annual premium.
 
          __________________________________________________