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     | Sunday, November 19, 2000 - 04:31 pm  If your looking to purchase a house between now and the end of the year and your using an FHA program, you may want to hold off until January 1, 01. HUD recently anounced a reduction in the upfront MIP premium. The old premium of 2.25% will be resuced to 1.5%. See letter: http://www.hudclips.org/sub_nonhud/cgi/nph-brs.cgi?d=MLET&s1=00-$[no]&op1=AND&SECT1=TXTHLB&SECT5=MLET&u=./legis.cgi&p=1&r=5&f=G MORTGAGEE LETTER 00-38 TO: ALL APPROVED MORTGAGEES SUBJECT: Single Family Loan Production - Further Reduction in Upfront Mortgage Insurance Premiums and Other Mortgage Insurance Premium Changes FHA's Mutual Mortgage Insurance Fund (MMI) has experienced an unprecedented financial turnaround. In 1990, the FHA MMI Fund had a negative economic value of $2.6 billion. Today, the fund has a positive economic value of $16 billion. In recognition of the continued strength and increase in the MMI fund, FHA has revised its Upfront Mortgage Insurance Premium (UFMIP) for all homebuyers where the loan is closed on or after January 1, 2001. This Mortgagee Letter announces: 1) A reduction in the UFMIP to 1.50%; 2) A shortened UFMIP refund schedule; and, 3) Cancellation of the annual mortgage insurance premium after the loan amount is reduced to 78% or less of the property value (based on the lower of the sales price or appraised value at origination. FHA is a great program for anyone who has had "credit issues" in the past. Combine an FHA program with a Charitable down payment from Nehemiah, Ameridream or others and you have ZERO down program for those with "less than perfect" credit. So if possible, save yourself some money and check with your lender to see if they are aware of this change.
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