FHA announces an increase in the annual MIP and significant changes to refinancing transactions.

Detailed Changes
Yesterday FHA issued Mortgagee Letters 2011-10 and 2011-11, which announced significant changes, with varying implementation dates. The table below summarizes the key changes and implementation dates.

Note as to effective date:
When the notation is 'Implement within 60 days', you can anticipate a flurry of announcements from all lenders as they make the changes to their policy.

Change Effective date
Annual MIP increase of 0.25%
FHA Case numbers assigned 4/18/11
Cancellation of old cases now 6 months instead of 12
Change starts 4/18/11, retroactive to all loans not yet closed.
Case orders cannot be ordered unless an active loan application is in process; lender must certify as to active subject buyer and property
Reminder, but effective 4/18/11, lender must certify having active application.
3-4 unit cash flow and reserve requirements now also applies to refinances
Cases assigned 60 days after 2/14/11
Streamlines: 5% NTB test applies to P&I+MIP,
Implement 'within the next 60 days'.