FHA update: New mortgage insurance payment durations

FHA Update:

For loans with FHA case numbers assigned on or after June 3, 2013, FHA will change the duration the annual MIP is collected.

For any mortgages with LTV greater than 90%, FHA will assess the annual MIP until the end of the mortgage term or for the first 30 years of the term, whichever occurs first. 

For all mortgages regardless of their amortization terms, mortgages with LTV less than or equal to 90% LTV, the annual MIP will be assessed until the end f the mortgage term or for the first 11 years of the mortgage term, whichever occurs first.

So in plain English and for majority of FHA borrowers: If you put less than 10% down payment, you will pay the annual MIP for the LIFE OF THE LOAN. If you put 10% or more down payment, you will pay the annual MIP for the first 11 years.

FHA also increased the FHA annual MIP in April 1, 2013.

Link to the full HUD Mortgage Letter 2013-04