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On January 31, 2013, the FHA issued Mortgagee Letter 2013-04 (ML 2013-04) revising FHA polices concerning cancellation of the annual mortgage insurance premium (Annual MIP) and increase to the Annual MIP. For a complete explanation of these Annual MIP changes and their respective effective dates, you may print ML 2013-04 by clicking here.

In the December 5, 2012, issue of the Federal Register (Vol. 77, Pages 72219 – 72223, click here) the Federal Housing Administration (FHA) published an Interpretive Rule to clarify the scope of the provision in the National Housing Act that prohibits certain sources of a mortgagor’s funds for the required minimum cash investment for single family mortgages to be insured by the FHA.

In the November 29, 2012, issue of the Federal Register (Vol. 77, Pages 71099 – 71101, click here) the Federal Housing Administration (FHA) published notice that it is extending the temporary waiver of the FHA Regulation prohibiting property flipping in connection with FHA insured loans until December 31, 2014. The notice Summary (redacted for brevity) is republished below: This notice of waiver extension announces that FHA is extending the availability of the temporary waiver of its regulation that prohibits the use of FHA financing to purchase single family properties that are being resold within 90 days of the previous acquisition, until December 31, 2014. This waiver, which was first issued in January 2010, took effect for all sales contracts executed on or after February 1, 2010. On January 28, 2011, FHA extended the waiver through calendar 2011. On December 28, 2011, FHA extended the waiver through calendar 2012. Prior to the waiver, a mortgage was not eligible for FHA insurance if the contract of sale for the purchase of the property that secured the mortgage was executed within 90 days of the prior acquisition by the seller, and the seller did not come under any of the exemptions to this 90-day period specified in the regulation. The waiver is applicable to all single family properties being resold within the 90-day period after prior acquisition. Additionally, the waiver is subject to certain conditions, and mortgages must meet these conditions to be eligible for the waiver [See pages 71100 – 71101 of the Notice]. The waiver is not applicable to mortgages insured under HUD’s Home Equity Conversion Mortgage (HECM) Program.

In Mortgagee Letter 12-4 (ML 12-4) dated March 6, 2012, the Federal Housing Administration (FHA) announced a new premium structure for FHA-insured single-family forward mortgages. FHA will increase its annual mortgage insurance premium (Annual MIP) by 0.10 percent for loans under $625,500 and by 0.35 percent for loans above $625,500. Upfront premiums (UFMIP) will also increase by 0.75 percent.

In the February 23, 2012, issue of the Federal Register (77 FR 10695), the Federal Housing Administration (FHA) published a request for comments on its revised proposal to reduce the amount of closing costs a seller (or other interested third parties) may pay on behalf of a homebuyer purchasing a home with an FHA-insured mortgage for the purposes of calculating the maximum mortgage amount. Comments are due on or before March 26, 2012. All comment submissions must refer to the Docket Number FR-5572-N-01 and the title “Federal Housing Administration (FHA) Risk Management Initiatives: Revised Seller Concessions,” and be submitted through one of the following methods: 1. Submission of Comments by Mail. Comments may be submitted by mail to the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. 2. Electronic Submission of Comments. Interested persons may submit comments electronically through the Federal eRulemaking Portal at www.regulations.gov. Commenters should follow the instructions provided on that site to submit comments electronically.

In today’s issue of the Federal Register (Vol. 76, No. 249, Pages 81363 – 81365) the Federal Housing Administration (FHA) published notice that it is extending the waiver of the FHA Regulation prohibiting property flipping in connection with FHA insured loans until December 31, 2012. The notice Summary (redacted for brevity) is republished below: This notice announces that FHA is extending the availability of the temporary waiver of its regulation that prohibits the use of FHA financing to purchase single family properties that are being resold within 90 days of the previous acquisition, until December 31, 2012. This waiver, which was first issued in January 2010, took effect for all sales contracts executed on or after February 1, 2010, and was extended in February 2011. The waiver is set to expire on December 31, 2011, and therefore HUD is extending the waiver for another calendar year. Prior to the waiver, a mortgage was not eligible for FHA insurance if the contract of sale for the purchase of the property that is the subject of the mortgage is executed within 90 days of the prior acquisition by the seller and the seller does not come under any of the exemptions to this 90-day period that are specified in the regulation. The waiver is applicable to all single family properties being resold within the 90-day period after prior acquisition. Additionally, the waiver is subject to certain conditions, and eligible mortgages must meet these conditions to take advantage of the waiver [See pages 81364 – 81365 of the Notice]. The waiver is not applicable to mortgages insured under HUD’s Home Equity Conversion Mortgage (HECM) Program. To read the complete Notice please visit http://www.gpo.gov/fdsys/pkg/FR-2011-12-28/pdf/2011-33411.pdf.

On September 21, 2011, the FHA issued Mortgagee Letter 2011-35 (ML 2011-35). The purpose of ML 2011-35 is to provide clarification on annual mortgage insurance premiums (annual MIP) for loans with forward amortization terms of 15 years or less and an LTV of 78 percent or less at origination. ML 2011-35 is effective for case numbers assigned on or after April 18, 2011. Except for certain editorial changes, this memorandum restates ML 2011-35. Those who wish to print ML 2011-35 may do so by clicking on the following web address: http://portal.hud.gov/hudportal/documents/huddoc?id=11-35ml.pdf.

On September 23, 2011, the FHA issued Mortgagee Letter 2011-34 (ML 2011-34). The purpose of ML 2011-34 is to announce changes to the requirements for obtaining, maintaining and utilizing FHA lender approval. All requirements in ML 2011-34 are effective immediately. Except for certain editorial changes, this memorandum restates ML 2011-34. Those who wish to print ML 2011-34 may do so by clicking on the following web address: http://portal.hud.gov/hudportal/documents/huddoc?id=11-34ml.pdf. ML 2011-34 modifies or supersedes specific sections of HUD Handbook 4060.1 REV-2, “FHA Title II Mortgagee Approval Handbook,” and Handbook 4155.2, “Lenders Guide to Single Family Mortgage Insurance Process” as follows:

On August 19, 2011, the FHA issued Mortgagee Letter 2011-29 that: 1. provides notice of FHA’s single family housing loan limits for Forward Mortgages and Home Equity Conversion Mortgages (HECMs) effective October 1, 2011 through December 31, 2011; 2. provides loan limit instructions for FHA-insured to FHA-insured refinance transactions; and 3. provides eligibility criteria and instructions for pipeline loans that have not closed on or before September 30, 2011.

In Mortgagee Letter 2011-10 (ML 2011-10) issued February 14, 2011, the FHA announced a 25 basis points (bps) increase in the annual mortgage insurance premiums effective for case numbers assigned on or after April 18, 2011. There will be no changes in the upfront mortgage insurance premium. The annual MIP increase applies to all mortgages insured under FHA’s Single Family Mortgage Insurance Programs except: