The Federal Housing Administration will raise mortgage insurance premiums this April in order to repair the health of its emergency fund.

The FHA upfront mortgage insurance premium will increase to 1.75% from 1% of the base home loan amount. This will apply regardless of the term or loan-to-value ratio beginning in April. (That is a $3000.00 increase on a $400,000 loan!)

The annual mortgage insurance premium will increase by 10 basis points for loans under the $625,500 limit beginning April 1 and by 35 bps for home loans above that amount starting in June, the FHA said Monday. Authority for these raises come under the payroll tax cut extension agreed to last fall.

Keep in mind that well qualified homebuyers don't need FHA anymore to buy with only 3% down. With a 660 credit score and a 45% debt to income ratio, home buyers can avoid the scrutiny of FHA underwriters, the upfront mortgage insurance, and not have to worry if a condo is in an FHA approved complex.

Call me today at (800) 736-0565 to see if your clients qualify for this great, new program. Make it a great day!