FHA issued Mortgagee Letter 2017-12, setting forth revised initial and annual mortgage insurance premiums (MIP) and principal limit factors for home equity conversion mortgages (HECMs). Currently, the initial MIP for HECMs is either .5% or 2.5% of the maximum claim amount, depending on the disbursements made to or on behalf of the borrower at closing or during the first 12-month disbursement period. The current annual MIP is 1.25% of the outstanding mortgage balance. In accordance with the Mortgagee Letter, the initial MIP is changed to 2% of the maximum claim amount for all mortgage loans and the annual MIP is changed to .5% of the outstanding mortgage balance. The Mortgagee Letter also announces that the Principal Limit Factor Tables for HECMs have been updated. The Mortgagee Letter becomes effective October 2, 2017.
