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Kentucky FHA Annual MIP and VA Funding Fee Reduction - Update!

 





HUD and VA have both announced reductions to the costs associated with their loans in Kentucky for FHA and VA loans and lower mortgage insurance premiums.  
 




 
Kentucky FHA Annual Mortgage Insurance Premium
 
HUD announced in Mortgagee Letter 2023-05 a .30% reduction to the annual (paid monthly) MIP rates as well as an increase to the base loan amount threshold for the lower MIP rates.  With this threshold increase, loan amounts greater than $625,500 but less than or equal to $726,200 can see up to .55% reduction in annual (paid monthly) MIP.
 
All loans in process and new applications will be able to use the lower rates, however, we are currently working on updating our system to accommodate and will advise as soon as that has been completed. This change helps to increase FHA products affordability and allows FHA product to be more competitive.
 
Please note, there is no change to the upfront Mortgage Insurance Premium (UFMIP), this change only impacts annual (paid monthly) MIP.  See below for a grid of the new rates versus the old rates.

New Annual (Paid Monthly) MIP Rates:

Loan Terms > 15 Years

Base Loan Amount

≤ 95% LTV

> 95% LTV

<=$726,200

.50%

.55%

>$726,200

.70%

.75%

Loan Terms ≤ 15 Years

Base Loan Amount

≤ 78% LTV

>78% and
≤ 90% LTV

> 90% LTV

<=$726,200

.15%

.15%

.40%

>$726,200

.15%

.40%

.65%

     

 Prior Annual (Paid Monthly) MIP Rates: 

Loan Terms > 15 Years

Base Loan Amount

≤ 95% LTV

> 95% LTV

<=$625,500

.80%

.85%

>$625,500

1.00%

1.05%

Loan Terms ≤ 15 Years

Base Loan Amount

≤ 78% LTV

>78% and
≤ 90% LTV

> 90% LTV

<=$625,500

.45%

.45%

.70%

>$625,500

.45%

.70%

.95%

     

Kentucky VA Funding Fee
 
PRMG is pleased advise and align with the recent announcement by VA in Circular 26-23-06 for a reduction to VA funding fee rates for loans closed on or after April 7, 2023.   See below for a grid of the new funding fee versus the old funding fee.

Funding Fee for loans closed on or after 04/07/23:

Loan Purpose

Down Payment

% for
1st Time Use

% for
Subsequent Use

Purchase

0 – 4.99%

2.15%

3.30%

Purchase

5 – 9.99%

1.50%

1.50%

Purchase

10% or More

1.25%

1.25%

Refinance
(Cash Out)

N/A

2.15%

3.30%

 Funding Fee for loans closed prior to 04/07/23:

Loan Purpose

Down Payment

% for
1st Time Use

% for
Subsequent Use

Purchase

0 – 4.99%

2.30%

3.60%

Purchase

5 – 9.99%

1.65%

1.65%

Purchase

10% or More

1.40%

1.40%

Refinance
​​​(Cash Out)

N/A

2.30%

3.60%

 
HUD announced in Mortgagee Letter 2023-05 a .30% reduction to the annual (paid monthly) MIP rates as well as an increase to the base loan amount threshold for the lower MIP rates.  With this threshold increase, loan amounts greater than $625,500 but less than or equal to $726,200 can see up to .55% reduction in annual (paid monthly) MIP.
 
All loans in process and new applications will be able to use the lower rates, however, we are currently working on updating our system to accommodate and will advise as soon as that has been completed. This change helps to increase FHA products affordability and allows FHA product to be more competitive.
 
Please note, there is no change to the upfront Mortgage Insurance Premium (UFMIP), this change only impacts annual (paid monthly) MIP.  See below for a grid of the new rates versus the old rates.

New Annual (Paid Monthly) MIP Rates:

Loan Terms > 15 Years

Base Loan Amount

≤ 95% LTV

> 95% LTV

<=$726,200

.50%

.55%

>$726,200

.70%

.75%

Loan Terms ≤ 15 Years

Base Loan Amount

≤ 78% LTV

>78% and
≤ 90% LTV

> 90% LTV

<=$726,200

.15%

.15%

.40%

>$726,200

.15%

.40%

.65%

     

 Prior Annual (Paid Monthly) MIP Rates: 

Loan Terms > 15 Years

Base Loan Amount

≤ 95% LTV

> 95% LTV

<=$625,500

.80%

.85%

>$625,500

1.00%

1.05%

Loan Terms ≤ 15 Years

Base Loan Amount

≤ 78% LTV

>78% and
≤ 90% LTV

> 90% LTV

<=$625,500

.45%

.45%

.70%

>$625,500

.45%

.70%

.95%

     

Kentucky VA Funding Fee
 
VA in Circular 26-23-06 for a reduction to VA funding fee rates for loans closed on or after April 7, 2023.   See below for a grid of the new funding fee versus the old funding fee.

Funding Fee for loans closed on or after 04/07/23:

Loan Purpose

Down Payment

% for
1st Time Use

% for
Subsequent Use

Purchase

0 – 4.99%

2.15%

3.30%

Purchase

5 – 9.99%

1.50%

1.50%

Purchase

10% or More

1.25%

1.25%

Refinance
(Cash Out)

N/A

2.15%

3.30%

 Funding Fee for loans closed prior to 04/07/23:

Loan Purpose

Down Payment

% for
1st Time Use

% for
Subsequent Use

Purchase

0 – 4.99%

2.30%

3.60%

Purchase

5 – 9.99%

1.65%

1.65%

Purchase

10% or More

1.40%

1.40%

Refinance
​​​(Cash Out)

N/A

2.30%

3.60%

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