Kentucky FHA PMI Changes for 2015

Louisville Kentucky FHA Mortgage Insurance Changescropped-cropped-homes_for_sale_louisville_ky_real_estate_condos_townhouses_patio_homes_louisvilles_choice_realty_banner.jpg

FHA MI Premiums Reduced

Effective 01/26/2015

Submit Your Loans and Take Advantage of the
New Reduced MI Premiums Today!

HUD announced in Mortgagee Letter 2015-01, certain FHA loans will have a reduced monthly MIP factor as reflected in the below table. The rate reduction for annual MIP applies to all FHA mortgages with terms greater than 15 years, excluding streamline refinance transactions that are refinancing existing FHA loans that were endorsed on or before May 31, 2009.

Loan Amount LTV (%) Previous New
< $625,500 < 95.00% 130 bps 80 bps
< $625,500 > 95.00% 135 bps 85 bps
> $625,500 < 95.00% 150 bps 100 bps
> $625,500 > 95.00% 155 bps 105 bps


  Thanks to previous changes to the FHA program, borrowers now have to pay mortgage insurance premiums longer than ever.

The length of time on which you’ll pay mortgage insurance premiums on your FHA loan is as follows:

Mortgage Term Loan to Value Ratio Length of Mortgage Premium
15 years or shorter Up to 90% 11 years
15 years or shorter Greater than 90% Full loan term
Greater than 15 years Up to 90% 11 years
Greater than 15 years Greater than 90% Full loan term


Kentucky FHA PMI Rates Changes 2013

Effective April 1, 2013 these are the new Kentucky FHA PMI Rates. There are two kinds of Kentucky FHA PMI Insurance.  To calculate your FHA PMI Premium for a Kentucky FHA loan – take your Loan Amount and multiply it by the UFPMI rate (which will likely be 1.75%).  Add that PMI Dollar Figure to your loan amount.  That’s what your principal and Insurance is going to be based upon.

Then that that TOTAL Loan Amount (including your Upfront PMI) and multiply that by the Annual FHA PMI Rate.  Divide that number by 12.  You will have THAT amount added to your Principal and Interest Payment with loans that have case numbers pulled after the end of March 2013.

Additionally, you will note that the new effective annual FHA PMI rates for loans with an LTV of less than or equal to 78 percent and with terms of up to 15 years have gone from ZERO to .45%. The new annual FHA PMI changes ONLY for these loans is effective for case numbers assigned on or after June 3, 2013.   

Term > 15 Years

Base Loan Amount


Effective Annual PMI UFPMI
≤$625,500 ≤ 95.00% April 1, 2013 1.30 % 1.75%
≤$625,500 > 95.00% April 1, 2013 1.35 % 1.75%
Above $625,500 ≤95.00% April 1, 2013 1.50% 1.75%
Above $625,500 > 95.00% April 1, 2013 1.55% 1.75%
NOTE! Guideline Change. NO MATTER What the LTV is, there is a FHA PMI fee

Term > 15 Years

Base Loan Amount


Effective Annual PMI UFPMI
≤$625,500 ≤ 90.00% April 1, 2013


≤$625,500 > 90.00% April 1, 2013


Above $625,500 ≤ 90.00% April 1, 2013


Above $625,500 > 90.00% April 1, 2013


Exception: New Streamline Refinances previously endorsed on or before May 31,2009
Base Loan Amount


Effective Annual PMI UFPMI
Any Amount


June 11, 2012



Note that FHA has also issued guidance regarding how long FHA PMI will be on the loan. Effective June 3, 2013 the following will be in effect:

Previous and New FHA Annual PMI Duration



Effective Previous New
≤ 15 yrs ≤ 78 April 1, 2013 No annual MIP 11 years
≤ 15 yrs > 78 – 90.00 April 1, 2013 Cancelled at 78% LTV 11 years
≤ 15 yrs > 90.00 April 1, 2013 Cancelled at 78% LTV Loan term
> 15 yrs ≤ 78 April 1, 2013 5 years 11 years
> 15 yrs > 78 – 90.00 April 1, 2013

Cancelled at 78% LTV & 5 yrs

11 years
> 15 yrs > 90.00% April 1, 2013

Cancelled at 78% LTV & 5 yrs

Loan Term
Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell

HUD Homeownership Center Reference Guide Refinances

HUD Homeownership Center Reference Guide Refinances.


louisville ky cash out refinance


Chapter 2
Mortgage Credit Guidelines
Page 2-19

A refinance transaction involves paying off an existing real estate debt from proceeds of a new mortgage. For all refinance loan transactions, 1) the borrower must be current for the month due and, 2) there must a current payoff statement in the case binder.

Under the terms and conditions outlined below, FHA will insure the following types of refinances:

A. Regular Refinances – “cash-out” and “no cash-out”

1. “Cash-Out” Refinances: the maximum loan-to-value and combined loan-to-value of any cash-out refinance is 85%. The calculation is based either off the appraised value or the original sales price, depending on the length of time the borrower has owned the property.

a)The loan is limited to a combined LTV (FHA insured first mortgage and any subordinated lien) of 85% of the appraised value, provided the borrower has owned the property for at least one year. Note that manufactured homes have other restrictions (Handbook 4155.1, section 3.A).
If the property was purchased less than one year preceding the application date, the LTV/CLTV (85%) for the mortgage amount must be calculated using the lesser of the appraised value or the original sales price of the property.
c) The property that is security for the refinanced mortgage may be a 1-4 unit property.
d)The property must be owner-occupied. Non-owner occupant co-borrower may not be added in order to meet FHA?s credit underwriting guidelines.
e)Properties owned free and clear may be refinance as cash-out transactions.
f)3-4 unit properties are required to pass the self sufficiency test and have a minimum of 3 months reserves after closing.
g) Properties acquired by inheritances within the past 12 months are eligible for a cash-out refinance transaction provided they have been occupying the property as their primary residence since the inheritance. The lender must document the acquisition by the borrowers via inheritance.
h)Manufactured homes: there are restrictions applicable please refer to Handbook 4155.1, section 3.A.

2.No Cash-Out Refinances (non-streamline): The maximum mortgage is based on the lesser of “a” and “b” below (a third calculation is applicable if owned less than 12 months):

a)The maximum LTV percentage is multiplied by the appraised value, exclusive of closing costs (please refer to Mortgagee Letter 2010-24).
b)The sum of the existing first lien, any purchase money second mortgage and/or any junior liens over 12 months old, closing costs, prepaid expenses, accrued late charges, escrow shortages, borrower paid repairs required by the appraisal, discount points, prepaid penalties charged on a conventional loan and FHA Title 1 loans as determined by the appropriate HOC subtract any refund of refund of upfront MIP. Note that the prepaid expenses may include per diem interest through the end of the month for the new loan, hazard/flood insurance premiums, mortgage insurance premiums and property tax deposits needed to establish the escrow account. The existing first lien may include the interest charged by the servicing lender, when the payoff is not received by the first of the month, but may not include any delinquent interest.

c)If the property was acquired less than one year before the loan application, and the existing loan is not an FHA loan, the original sales price, must be considered in calculating the maximum mortgage. Refer to Handbook 4155.1, section 3.B.

d)There may not be more than $500 in incidental cash back to the borrower.

e)If there is an existing subordinate lien refer to Handbook 4155.1, section 3.A, 3.B and ML 11-11.

f)Additional restrictions apply for manufactured homes; refer to Handbook 4155.1, section 3.A.

B.Streamline Refinances (with or without an appraisal): Streamline transactions involve the refinance of the FHA insured first mortgage only. This type of loan is designed to lower the monthly principal and interest payments on the current FHA insured mortgage and involves no cash back to the borrower. All Streamline transactions must meet the following criteria:

Note: Effective with case numbers assigned on or after April 18, 2011, the use of an appraisal to increase the insurable mortgage balance for a “non-qualifying” streamline refinance will no longer be permitted.

I)At the time of loan application: a) the borrower must be current, b) must have made at least 6 full months of payments since the first payment date and, c) at least 210 days must have passed from the closing date of the mortgage being refinanced.

2)At the time of loan application the borrower must exhibit an acceptable payment history as described below:

a) For mortgages with less than a 12 month payment history, the borrower must have made all mortgage payments within the month due.
b)For mortgages with a 12 month payment history or greater, the borrower must have:

i)Experienced no more than one 30 day late payment in the preceding 12 months, AND
ii)Made all mortgage payments within the month due for the three months prior to the date of loan application.

III)The lender must determine there is a net tangible benefit as a result of the streamline refinance transaction, with or without an appraisal. Net Tangible benefit is defines as:

a) Reduction to the principal, interest plus MIP by at least 5% (compare the new P & I & MIP to the existing P & I & MIP), or
For details of permissible minimum thresholds involving refinancing in or out of an ARM refer to ML 2011-11.

4)Investment/secondary property: for FHA financed properties that have become investment properties or secondary residences, a streamline refinance is only permitted without an appraisal. All other criteria must be met, however these properties may not be refinanced into an ARM.

5) Assets: If assets are needed to close, they must be verified.

6)A current payoff statement must be in the case binder.

7) Subordinate financing: if subordinate financing will remain in place, the maximum CLTV is 125%. To calculate the maximum CLTV for streamlines without an appraisal, use the “original property value” shown on the Refinance Authorization screen in FHAC. For streamlines with an appraisal, the CLTV calculation is based on the new appraised value.

8)LDP and GSA lists are required to be checked, however there is no need to check the CAIVRS.

9)URLA: for non-credit qualifying streamlines an abbreviated version of the URLA is permitted, however for credit qualifying streamlines, a fully completed URLA is required.

10)Maximum mortgage:

a) Streamline refinance without an appraisal (owner occupied): the maximum mortgage is the outstanding principal balance plus interest charged by the servicing lender (but may not include delinquent interest, late charges or escrow shortages), minus UFMIP refund plus new UFMIP.

b) Streamline refinance with an appraisal: as reflected above for case number assigned on or after April 18, 2011. For cases with case numbers assigned prior to this date refer to Handbook 4155.1, section 6.C.

c) Streamline refinance without an appraisal (non-owner occupied): these may only be refinanced without an appraisal and the new base mortgage may only cover the outstanding principal balance less the any UFMIP refund. Further the term of the mortgage must be the lesser of 30 years or the remaining term of the mortgage plus 12 years.

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.comKey Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

Website Fine Print

The content provided on this website is presented or compiled by Joel Lobb and is provided for informational purposes only. It does not necessarily represent the views or opinions of Key Financial Mortgage .Neither Joel Lobb nor Key Financial Mortgage assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information disclosed, or represents that its use would not infringe privately owned rights.

The mortgage or financial services or strategies mentioned in this website may not be not suitable for you.

Key Financial Mortgage is an Equal Opportunity Lender. All rights Reserved.

Joel Lobb is a Licensed Mortgage Originator:NMLS #57916. Key Financial Mortgage NMLS # 1800 is a licensed Mortgage Broker Company in the State of Kentucky

Legal Disclaimer

This web site is not the FHA, VA, USDA, HUD or any other government organization responsible for managing, insuring, regulating or issuing residential mortgage loans.

**Download Fair Housing Booklet – CLICK HERE

All approvals and rates are not guaranteed, and are only issued based on standard mortgage qualifying guidelines.

Kentucky FHA loans with Co-signers

What are the guidelines for co-borrowers and co-signers?


Co- borrowers take title to the property and are obligated on the mortgage note and must also sign the security instrument. The co-borrower’s income, assets, liabilities, and credit history are considered in determining creditworthiness.
Co-signers do not hold ownership interest in a property, but are liable for repaying the obligation and must sign all documents with the exception of the security instruments. The co-signers income, assets, liabilities, and credit history are considered in determining creditworthiness for the mortgage and the co-signer must complete and sign the loan application.
The following conditions also apply to co-borrower and co-signer eligibility:

1. A co-borrower or a co-signer may not be a party that has a financial interest in the transaction, such as the seller, builder, real estate agent, etc. Exceptions may be granted if the seller and co-borrower/co-signer is related to the owner by blood, marriage or law.

2. An individual signing the loan application must not be otherwise ineligible for participation.

3. Unless otherwise exempted (e.g., military service with overseas assignments, U.S. citizens living abroad), any non-occupying co-borrowers or co-signers must have a principal residence in the United States. All references to co-borrowers – including the 75 percent LTV limits etc. – apply equally to co-signers (except co-signers do not take title to the property or sign the security instruments).