On January 21, 2010, FHA issued M.L. 2010-02 that announced effective for FHA loans with case numbers assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium (“UFMIP”) of 2.25 percent. The full text of M.L. 2010-02, is attached to this memorandum, and is briefly summarized below: 1. The policy change increased premiums for purchase money and refinance transactions, including FHA-to-FHA credit qualifying and non-credit qualifying streamlined refinance transactions. 2. M.L. 2010-02 applies to all mortgages insured under FHA’s Single Family Insurance Programs except for those identified in the Mortgagee Letter. 3. FHA will charge an UFMIP in an amount equal to the following percentages of the mortgage: Purchase Money Mortgages and Full-Credit Qualifying Refinance = 2.25 percent Streamline Refinances (all types) = 2.25 percent HOPE for Homeowners (Delinquent Mortgagors) = 2.00 percent Home Equity Conversion Mortgages = 2.00 percent 4. Annual premiums are not changed by M.L. 2010-02. 5. As the UFMIP remains below the statutory cap as authorized in the National Housing Act, as amended by the Housing and Economic Recovery Act in 2008, no variable rate for counseled first-time homebuyers is provided for in the Mortgagee Letter.

Complete Memorandum