The Housing and Economic Recovery Act of 2008 provides for a one-year moratorium on the implementation of FHA’s risk-based premiums beginning October 1, 2008.  Consequently, effective with new FHA case number assignments on or after that date, FHA will no longer base its mortgage insurance premiums on a combination of credit bureau score and loan-to-value ratio.  The new premiums (upfront and annual) to be implemented for all loans for which a case number is assigned on or after October 1, 2008, are described below.  Mortgagee Letter 2008-16 is rescinded in its entirety.  Please note that certain parts of that mortgagee letter are retained and reiterated in the guidance that follows.

Upfront Premiums:  FHA will charge an upfront premium in an amount equal to the following percentages of the mortgage: 

• Purchase Money Mortgages and Full-Credit Qualifying Refinances = 1.75 Percent

• Streamline Refinances (all types) = 1.50 Percent

• FHASecure (Delinquent Mortgagors) = 3.00 Percent.