Reminder: October 1 moratorium on FHA's Risk-Based Premiums Initiative in Loan Prospector®

On October 1, 2008, the U.S. Department of Housing and Urban Development (HUD) implemented a one-year moratorium on the Federal Housing Administration's (FHA) Risk-Based Premium structure. As a result of this moratorium, for FHA Case Numbers issued on or after October 1, FHA will no longer base its insurance premiums on a combination of credit bureau score and loan-to-value ratio. Effective October 1, version 2.1 of the FHA TOTAL Mortgage Scorecard will include the new premiums (upfront and annual), as outlined in HUD’s September 4 Mortgagee Letter 2008-22 [DOC].

To align with the changes announced in the September 4 Mortgagee Letter 2008-22 [DOC], effective October 1, the FHA TOTAL Mortgage Scorecard will send:

• All FHA initial submissions in Loan Prospector with or without FHA Case Numbers to version 2.1.  
• All FHA resubmissions in Loan Prospector with FHA Case Numbers dated on or after October 1, 2008, to version 2.1.

FHA submissions in Loan Prospector are now being sent to the appropriate version of the FHA TOTAL Mortgage Scorecard; however, feedback messages in Loan Prospector have not been updated. As a result, you will continue to receive feedback messages associated with FHA’s risk-based pricing initiative for FHA submissions to version 2.1 of the FHA TOTAL Mortgage Scorecard.

Learn more details on managing submissions to the FHA TOTAL Mortgage Scorecard through Loan Prospector on FreddieMac.com.