www.hudclips.org U. S. Department of Housing and Urban Development Washington, D.C. 20410-8000 March 12, 1996 Mortgagee Letter 96-13B TO: ALL APPROVED MORTGAGEES ATTENTION: Originating and Servicing Lenders SUBJECT: Amending Provisions to Mortgagee Letter 95-53, Refinancing Section 235 Mortgages ATTACHMENT 2 PAGE 1 OF 5 SECTION 235(r) MORTGAGES - INITIAL AND ANNUAL MORTGAGE INSURANCE PREMIUM FACTOR TABLE .7% MIP FACTORS PER THOUSAND DOLLARS OF THE MORTGAGE AMOUNT 235(r) NEW MORTGAGE TERM IN YEARS FOR A 235(r) MORTGAGE INTEREST RATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 6.00 6.761 6.790 6.814 6.834 6.850 6.865 6.878 6.889 6.899 6.907 6.915 6.922 6.928 6.934 6.939 6.943 6.25 6.764 6.793 6.817 6.837 6.853 6.868 6.880 6.891 6.901 6.910 6.918 6.924 6.931 6.936 6.941 6.945 6.50 6.767 6.796 6.820 6.839 6.856 6.870 6.883 6.894 6.904 6.912 6.920 6.927 6.933 6.938 6.943 6.947 6.75 6.770 6.799 6.822 6.842 6.859 6.873 6.866 6.897 6.906 6.915 6.922 6.929 6.935 6.940 6.945 6.950 7.00 6.773 6.801 6.825 6.845 6.862 6.876 6.888 6.899 6.909 6.917 6.924 6.931 6.937 6.942 6.947 6.951 7.25 6.776 6.804 6.828 6.848 6.864 6.879 6.891 6.901 6.911 6.919 6.927 6.933 6.939 6.944 6.949 6.953 7.50 6.779 6.807 6.831 6.850 6.867 6.881 6.893 6.904 6.914 6.921 6.929 6.935 6.941 6.946 6.951 6.955 7.75 6.782 6.810 6.834 6.853 6.869 6.883 6.896 6.906 6.916 6.924 6.931 6.937 6.943 6.948 6.953 6.957 8.00 6.785 6.813 6.836 6.855 6.872 6.886 6.898 6.909 6.918 6.926 6.933 6.939 6.945 6.950 6.954 6.959 8.25 6.787 6.815 6.839 6.858 6.875 6.888 6.901 6.911 6.920 6.928 6.935 6.941 6.947 6.952 6.956 6.960 8.50 6.790 6.818 6.841 6.861 6.877 6.891 6.903 6.913 6.922 6.930 6.937 6.943 6.948 6.953 6.958 6.961 8.75 6.793 6.821 6.844 6.863 6.879 6.873 6.905 6.915 6.924 6.932 6.939 6.945 6.950 6.955 6.959 6.963 FOOTNOTE : AT ORIGINATION, THE 235(r) MORTGAGE AMOUNT MUST BE ROUNDED DOWN TO THE NEAREST $50.00 BEFORE THE MIP FACTOR IS APPLIED. THE MIP FACTOR IS BASED ON A PER ANNUM BASIS. THE MIP FACTOR, WHICH IS ESTABLISHED AT THE 235(r) MORTGAGE APPLICATION, IS USED TO DETERMINE THE MIP FOR SUBSEQUENT PREMIUM YEARS. ATTACHMENT 2 PAGE 2 OF 5 SECTION 235(r) MORTGAGES - INITIAL AND ANNUAL MORTGAGE INSURANCE PREMIUM FACTOR TABLE .7% MIP FACTORS PER THOUSAND DOLLARS OF THE MORTGAGE AMOUNT 235(r) NEW MORTGAGE TERM IN YEARS FOR A 235(r) MORTGAGE INTEREST RATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 9.00 6.796 6.824 6.846 6.866 6.882 6.895 6.907 6.917 6.926 6.934 6.941 6.947 6.952 6.957 6.961 6.964 9.25 6.798 6.827 6.849 6.868 6.884 6.898 6.909 6.919 6.928 6.936 6.943 6.949 6.954 6.958 6.962 6.966 9.50 6.801 6.829 6.852 6.871 6.886 6.900 6.912 6.922 6.930 6.938 6.944 6.950 6.955 6.960 6.964 6.967 9.75 6.804 6.832 6.854 6.873 6.889 6.902 6.914 6.923 6.932 6.940 6.946 6.952 6.957 6.961 6.965 6.969 10.00 6.807 6.834 6.856 6.875 6.891 6.904 6.916 6.925 6.934 6.941 6.947 6.953 6.958 6.963 6.966 6.970 10.25 6.809 6.836 6.859 6.878 6.893 6.907 6.918 6.927 6.936 6.943 6.949 6.955 6.960 6.964 6.968 6.971 10.50 6.812 6.839 6.861 6.880 6.895 6.908 6.920 6.929 6.937 6.944 6.951 6.956 6.961 6.966 6.969 6.972 10.75 6.814 6.842 6.864 6.882 6.898 6.911 6.921 6.931 6.939 6.946 6.952 6.958 6.963 6.967 6.970 6.973 11.00 6.817 6.844 6.866 6.884 6.899 6.913 6.923 6.933 6.941 6.948 6.954 6.959 6.964 6.968 6.971 6.974 11.25 6.819 6.846 6.868 6.887 6.902 6.914 6.925 6.935 6.943 6.949 6.955 6.960 6.965 6.969 6.973 6.976 11.50 6.822 6.849 6.871 6.889 6.904 6.916 6.927 6.936 6.944 6.951 6.957 6.962 6.966 6.970 6.973 6.977 11.75 6.824 6.851 6.873 6.891 6.906 6.918 6.929 6.938 6.946 6.952 6.958 6.963 6.967 6.971 6.975 6.978 12.00 6.827 6.853 6.875 6.893 6.908 6.920 6.931 6.939 6.947 6.954 6.959 6.965 6.969 6.973 6.976 6.979 FOOTNOTE :AT ORIGINATION, THE 235(r) MORTGAGE AMOUNT MUST BE ROUNDED DOWN TO THE NEAREST $50.00 BEFORE THE MIP FACTOR IS APPLIED. THE MIP FACTOR IS BASED ON A PER ANNUM BASIS. THE MIP FACTOR, WHICH IS ESTABLISHED AT THE 235(r) MORTGAGE APPLICATION, IS USED TO DETERMINE THE MIP FOR SUBSEQUENT PREMIUM YEARS. ATTACHMENT 2 PAGE 3 OF 5 SECTION 235(r) MORTGAGES - INITIAL AND ANNUAL MORTGAGE INSURANCE PREMIUM FACTOR TABLE .7% MIP FACTORS PER THOUSAND DOLLARS OF THE MORTGAGE AMOUNT 235(r) NEW MORTGAGE TERM IN YEARS FOR A 235(r) MORTGAGE INTEREST RATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 12.25 6.829 6.856 6.877 6.895 6.909 6.922 6.932 6.941 6.949 6.955 6.961 6.966 6.970 6.974 6.977 6.980 12.50 6.832 6.858 6.879 6.897 6.911 6.924 6.934 6.943 6.950 6.957 6.962 6.967 6.971 6.975 6.978 6.980 12.75 6.834 6.860 6.881 6.899 6.913 6.926 6.936 6.944 6.952 6.958 6.963 6.968 6.972 6.975 6.979 6.981 13.00 6.836 6.862 6.884 6.901 6.915 6.927 6.937 6.946 6.953 6.959 6.965 6.969 6.973 6.977 6.979 6.982 13.25 6.839 6.865 6.885 6.903 6.917 6.929 6.939 6.947 6.955 6.961 6.966 6.970 6.974 6.977 6.980 6.983 13.50 6.841 6.867 6.888 6.905 6.919 6.930 6.940 6.949 6.956 6.962 6.967 6.971 6.975 6.978 6.981 6.984 13.75 6.843 6.869 6.890 6.906 6.920 6.932 6.942 6.950 6.957 6.963 6.968 6.972 6.976 6.979 6.982 6.984 14.00 6.845 6.871 6.891 6.908 6.922 6.934 6.943 6.951 6.958 6.964 6.969 6.973 6.977 6.980 6.983 6.985 14.25 6.848 6.873 6.894 6.910 6.924 6.935 6.945 6.953 6.959 6.965 6.970 6.974 6.978 6.981 6.983 6.986 14.50 6.850 6.875 6.895 6.912 6.926 6.937 6.946 6.954 6.961 6.966 6.971 6.975 6.978 6.982 6.984 6.986 14.75 6.852 6.877 6.897 6.914 6.927 6.938 6.948 6.955 6.962 6.968 6.972 6.976 6.979 6.982 6.985 6.987 15.00 6.854 6.879 6.899 6.915 6.929 6.940 6.949 6.957 6.963 6.968 6.973 6.977 6.980 6.983 6.986 6.988 15.25 6.856 6.881 6.901 6.917 6.930 6.941 6.950 6.958 6.964 6.969 6.974 6.978 6.981 6.983 6.986 6.988 15.50 6.858 6.883 6.903 6.919 6.932 6.943 6.952 6.959 6.965 6.971 6.975 6.979 6.982 6.984 6.987 6.989 15.75 6.860 6.885 6.904 6.921 6.933 6.944 6.953 6.960 6.966 6.971 6.976 6.979 6.982 6.985 6.987 6.989 16.00 6.862 6.887 6.906 6.922 6.935 6.945 6.954 6.961 6.967 6.972 6.976 6.980 6.983 6.986 6.988 6.990 ATTACHMENT 2 PAGE 4 OF 5 SECTION 235(r) MORTGAGES - INITIAL AND ANNUAL MORTGAGE INSURANCE PREMIUM FACTOR TABLE .7% MIP FACTORS PER THOUSAND DOLLARS OF THE MORTGAGE AMOUNT 235(r) NEW MORTGAGE TERM IN YEARS FOR A 235(r) MORTGAGE INTEREST RATE 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 16.25 6.864 6.888 6.908 6.924 6.936 6.946 6.955 6.962 6.968 6.973 6.977 6.981 6.984 6.986 6.988 6.990 16.50 6.866 6.890 6.910 6.925 6.938 6.948 6.956 6.963 6.969 6.974 6.978 6.981 6.984 6.987 6.989 6.990 16.75 6.868 6.882 6.911 6.926 6.939 6.949 6.958 6.964 6.970 6.975 6.979 6.982 6.985 6.987 6.989 6.991 17.00 6.870 6.894 6.913 6.928 6.941 6.950 6.959 6.966 6.971 6.976 6.980 6.983 6.985 6.988 6.990 6.991 17.25 6.872 6.896 6.915 6.929 6.942 6.952 6.960 6.966 6.972 6.976 6.980 6.983 6.986 6.988 6.990 6.992 17.50 6.874 6.897 6.916 6.931 6.943 6.953 6.961 6.967 6.973 6.977 6.981 6.984 6.987 6.989 6.990 6.992 17.75 6.876 6.899 6.918 6.932 6.944 6.954 6.962 6.968 6.974 6.978 6.981 6.985 6.987 6.989 6.991 6.992 18.00 6.878 6.901 6.919 6.934 6.946 6.955 6.963 6.969 6.974 6.979 6.982 6.985 6.987 6.989 6.991 6.993 ATTACHMENT 2 PAGE 5 OF 5 FOOTNOTE: THESE FACTORS ARE TO BE USED TO CALCULATE THE APPROXIMATE INITIAL AND ANNUAL MORTGAGE INSURANCE PREMIUM (MIP) FOR THE 235(r) INSURED MORTGAGE. THE USE OF THESE FACTORS WILL READILY PERMIT AN ORIGINATING MORTGAGEE TO COMPUTE IN ADVANCE THE APPROXIMATE INITIAL AMOUNT OF THE FIRST YEAR'S PREMIUM AND WILL READILY PERMIT A SERVICING MORTGAGEE TO COMPUTE IN ADVANCE THE ANNUAL AMOUNT FOR SUBSEQUENT PREMIUM YEAR(S) AND THUS PERMIT THE COLLECTION OF SUFFICIENT MIP TO PAY THE PREMIUM PER HUD'S REQUIREMENTS. TO COMPUTE THE PREMIUM WHICH WILL BE DUE, DIVIDE THE MORTGAGE AMOUNT (OR, THE UNPAID PRINCIPAL BALANCE WHICH DOES NOT INCLUDE PARTIAL PREPAYMENTS OR DELINQUENT PAYMENTS) BY $1,000.00 AND MULTIPLY BY THE APPLICABLE FACTOR. THIS WILL PRODUCE THE APPROXIMATE PREMIUM WHICH WHEN DIVIDED BY 12, WILL RESULT IN THE REQUIRED MONTHLY DEPOSITS FOR MIP FOR THE FIRST PREMIUM YEAR (OR, SUBSEQUENT PREMIUM YEARS). FOR EXAMPLE, ASSUME A 9.0%, 25-YEAR MORTGAGE WITH A MORTGAGE AMOUNT OF $12,700.00 (OR, THE UNPAID PRINCIPAL BALANCE). THE "PER THOUSAND" FACTOR FOR THE FIRST YEAR'S PREMIUM YEAR (AND, SUBSEQUENT PREMIUM YEARS) IS 6.964. IN ORDER TO DETERMINE THE MONTHLY ESCROW WHICH SHOULD BE COLLECTED, THE FOLLOWING COMPUTATIONS ARE MADE: $12,700 DIVIDED BY $1,000.00 EQUALS 12.7 THOUSANDTHS 12.7 THOUSANDTHS TIMES 6.964 PER THOUSAND DOLLARS EQUALS $88.4428 THE APPROXIMATE BILLING EQUALS $88.44 $88.44 DIVIDED BY 12 MONTHS EQUALS $7.37 WHICH IS THE MONTHLY DEPOSIT TO ESCROW FOOTNOTE: AT ORIGINATION, THE 235(r) MORTGAGE AMOUNT MUST BE ROUNDED DOWN TO THE NEAREST $50.00 BEFORE THE MIP FACTOR IS APPLIED. AN EXAMPLE OF A SUBSEQUENT PREMIUM YEAR(S) IS NOT ILLUSTRATED; HOWEVER, THE COMPUTATION IS THE SAME WHERE THE UNPAID PRINCIPAL BALANCE (UPB) IS SUBSTITUTED FOR THE MORTGAGE AMOUNT AND THE UPB IS NOT ROUNDED DOWN TO THE NEAREST $50.00.