Industry NewsMortgage

FHA premium changes take effect Sept. 7

Upfront payment dialed back, but annual premiums increasing

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Editor's note: This story has been updated and corrected. FHA has pushed back the schedule for implementing changes to premium structuring from Sept. 7 to Oct. 4. Upfront premiums will be reduced to 1 percent, not 1.25 percent as stated in a previous version of this story.Upfront premiums for FHA mortgage insurance will soon be dialed back from 2.25 percent to 1 percent, while annual premiums will nearly double, Federal Housing Commissioner David Stevens announced Thursday.(Under the timetable originally announced by Stevens, the changes were to take effect Sept. 7. HUD has since pushed implementation back to Oct. 4 to give lenders more time to update their systems). The changes follow Wednesday's passage of legislation raising the statutory limit on annual premiums from 0.55 percent to 1.55 percent.Stevens said the Federal Housing Administration won't raise annual premiums to the statutory limit just yet. Instead, FHA will boost the current 0.5 percent annual premium for borrowers wit...