FAQ: How is the FHA Monthly MIP Calculated?

Q: How is the FHA Monthly MIP Calculated in Charlie?

A: In Charlie, the FHA Monthly MIP percent is determined through a structured sequence of rule groups. The system evaluates each group in order, and once a rule group applies, the calculation stops. If a group does not apply, Charlie moves to the next group until the appropriate MIP percent is identified. 

Calculation Sequence for MIP Percent

Rule Group 1: Mortgage Type Check

• IF: Mortgage Type is NOT FHA

• THEN: End calculation (MIP does not apply).

Purpose: Ensures MIP percent is only calculated for FHA loans.

Rule Group 2: Section of the Act 247

• IF: Section of the Act = 247

• THEN: MIP percent = 0.00%

Purpose: Exempts loans under Section 247 from any MIP charges.

Rule Group 3: Streamline or Simple Refinances

• IF: Refinance Type = Streamline or Simple

  • AND IF: Previous endorsement date ≤ 05/31/2009

    • THEN: MIP percent = 0.01%

  • ELSE IF: Previous endorsement date > 05/31/2009 or unavailable ("--")

    • THEN: MIP percent = 0.55%

Purpose: Applies reduced MIP rates for certain refinance scenarios based on the endorsement date of the previous loan.

Note:

• If Previous endorsement date is unavailable when processing the loan, Charlie assumes the later condition and applies:

  • 0.01% if endorsement date is ≤ 05/31/2009

  • 0.55% otherwise

Rule Group 4: Amortization Period Over 180 Months (Non-Streamline/Simple)

These rules apply to purchases and refinances that are NOT Simple or Streamline:

Rule Group 4a: Base Loan Amount ≤ $625,500

• IF: Amortization Period > 180 months

  • AND: Base Loan Amount ≤ $625,500

    • THEN:

      • LTV ≤ 95%: MIP percent = 0.80%

      • LTV > 95%: MIP percent = 0.85%

Rule Group 4b: Base Loan Amount > $625,500

• IF: Amortization Period > 180 months

  • AND: Base Loan Amount > $625,500

    • THEN:

      • LTV ≤ 95%: MIP percent = 1.00%

      • LTV > 95%: MIP percent = 1.05%

Rule Group 5: Amortization Period 180 Months or Less (Non-Streamline/Simple)

These rules apply to purchases and refinances that are NOT Simple or Streamline:

Rule Group 5a: Base Loan Amount ≤ $625,500

• IF: Amortization Period ≤ 180 months

  • AND: Base Loan Amount ≤ $625,500

    • THEN:

      • LTV ≤ 90%: MIP percent = 0.45%

      • LTV > 90%: MIP percent = 0.70%

Rule Group 5b: Base Loan Amount > $625,500

• IF: Amortization Period ≤ 180 months

  • AND: Base Loan Amount > $625,500

    • THEN:

      • LTV ≤ 78%: MIP percent = 0.45%

      • LTV > 78% and ≤ 90%: MIP percent = 0.70%

      • LTV > 90%: MIP percent = 0.95%

Reference Material:

https://www.hud.gov/hud-partners/housing-premium-calculation