Atlanta FHA Mortgage Payments Increasing

HUD has announced that for case numbers assigned on and after April 18, 2011, the monthly MIP will be increasing by 0.25% annually on all loans. The reason given by HUD for the increase is to keep the FHA Mutual Mortgage Insurance Fund financially sound. With all of the foreclosures over the past two years, the fund has been depleted and this move is made to increase the reserve.

For potential home buyers who have a short time horizon to purchase, every effort should be made to get a signed contract prior to 4/18 so that your lender can have a case number assigned. Don’t just assume that your lender knows about this deadline, follow up with them to ensure that they provide you with a copy of the case number assignment so that you know you are protected. Also note that you must have a property selected in order to get a case number.

What is the impact of the change?

For every $100k borrowed, your monthly payment will increase by $20.83 per month. So, if you are borrowing $250k, multiply $20.83 by 2.5 which results in a monthly payment increase of $52.08. Below are the specifics of the change from HUD.