Suspension of the MPI Rate Discount Explained

On January 9, 2017, the Department of Housing and Urban Development (HUD) announced a reduction in the annual mortgage insurance premium (MIP) for FHA* loans made on or after January 27, 2017. It was anticipated that these discounted MIP rates would create opportunities for first-time and lower-income buyers, as well as offset the effects of higher mortgage rates.

However, on January 20, 2017, the new administration suspended this MIP reduction indefinitely and rates will not change as previously announced. Although the Secretary of HUD doesn’t have authority to cancel regulations that have already gone into effect, the administration does have the ability to freeze new or pending regulations.

The memo issued by White House Chief of Staff, Reince Priebus, indicates that those regulations will be delayed for 60 days to allow time for review and potential revisions. According to Federal Housing Administration (FHA), borrowers would have saved an average of $500 this year. Next month will show how these new regulations will play a part in the housing market.


For more information, please contact your Stearns Lending Mortgage Loan Originator or view the following resources:

Trump Puts Freeze On New Regulations
U.S. Department of Housing and Urban Development Memo

* Stearns Lending, LLC is an FHA Approved Lending Institution, and is not acting on behalf of or at the direction of HUD/FHA or the Federal government.
The information provided in this article is for dissemination to real estate and financial business entities only, and is not intended for use as an advertisement for the extension of credit to consumers.

- By Michael Kearney, Jan 16, 2017