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California FHA Mortgage Insurance Premiums to Go Down in 2017

We’ve just learned that HUD will reduce the California FHA annual mortgage insurance premium (MIP) for 2017, effective later this month. This could save homeowners an average of $500 this year, according to officials.

In 2017, the annual MIP for most California borrowers using a 30-year FHA loan will go down to 60 basis points, or 0.60% of the loan amount. See the table below for details.

FHA Annual Mortgage Insurance Premium (MIP) for California, 2017

Borrowers who use the Federal Housing Administration (FHA) loan program to buy a home are typically required to pay two different mortgage insurance premiums, or MIPs. There’s an upfront premium, which is generally 1.75% of the loan amount. And there’s an annual premium, which is about to be reduced for 2017.

On January 9, 2017, Department of Housing and Urban Development (HUD) announced it was going to reduce the annual mortgage insurance premium rate by 25 basis points, or 0.25%. This is good news for California home buyers who use the program, as they could save an average of $500 per year according to HUD.

The reduced California FHA mortgage insurance rate will apply to most new mortgages with a closing / disbursement date on or after January 27, 2017.

The table below accompanied the official HUD mortgagee letter, which was sent out on January 9. The reduced California mortgage insurance premiums are shown under the “New MIP” column on the right.

FHA annual MIP table

How to read this table: FHA MIP tables can be a bit confusing at first glance. The first thing you need to do is find your loan term or length. If you plan to use a 30-year loan, refer to the top half of the table that says “term > 15 years.” Next, use the loan amount column. The “LTV” column is basically the inverse of your down payment. Most FHA borrowers put down 3.5%, for an LTV of 96.5%.

Bottom line: Most California FHA borrowers in 2017 will end up with an annual mortgage insurance premium rate of 60 basis points, or 0.60% of the loan amount.

Higher Loan Limits Across the State

In related news, California FHA loan limits have been raised for 2017. Conforming and VA limits have also gone up. Federal housing officials made these changes in response to significant home-price gains that occurred nationwide during 2016.

FHA loan limits vary by county and are generally the same across an entire metro area. In California, the maximum loan size ranges from $275,665 in the more affordable housing markets, up to $636,150 in pricier markets like San Francisco and Los Angeles. You’ll find FHA limits for all California counties on this page of our site.

Apply for an FHA Loan Today

Do you plan to buy a home in California in 2017? Want to use an FHA loan to finance your purchase? We can help. Bridgepoint Funding has been helping borrowers in the Golden State for more than 15 years. We are a California-based mortgage company offering competitive rates on a variety of loan products.

Please contact us if you have questions about FHA mortgage insurance in California, or if you would like to receive a rate quote.

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