HUD’s QM MIP Factor

We’ve received several calls from confused clients regarding the mortgage insurance premium (MIP) factor and BSA Training and Banking Regulations Compliance Consulting jerod11 - HUD's QM MIP Factorhow it relates to the new HUD Qualified Mortgage (QM) status.

Basically, all HUD (FHA) loans are QMs.  They will receive a “conclusive” safe harbor if the rate spread between the annual percentage rate (APR) and average prime offer rate (APOR) is less than or equal to the annual MIP premium plus 1.15%.  On the other hand, they will receive a “presumption of compliance” if the APR/APOR rate spread is greater than the annual MIP premium plus 1.15%.

You will find the current annual MIP rates within the 2nd and 3rd tables of HUD’s Mortgage Letter 2013-04.  Please note the rates are noted as “basis points” so, for example, 135 bps = 1.35%.

Jerod Moyer

Share This