STATEMENT FROM THE NATIONAL ASSOCIATION OF MORTGAGE BROKERS ON FHA MORTGAGE INSURANCE PREMIUM POLICY

The National Association of Mortgage Brokers (NAMB) calls for the Federal Housing Administration to end its Life of Loan mortgage insurance premium (MIP) policy and allow borrowers to achieve MIP relief once they reach 78 percent loan-to-value, consistent with the original regulatory framework.

The FHA's recent Mutual Mortgage Insurance Fund (MMIF) report demonstrates the Agency's exceptional financial health and capital position—a stark contrast to the economic conditions that prompted the Life of Loan MIP policy in 2013 following the housing crisis. With more than a decade of strong recovery and performance, the original rationale for this emergency measure no longer justifies the burden it places on borrowers.

Borrowers who have paid mortgage insurance premiums to the point of reaching 78 percent LTV have effectively subsidized the FHA program well beyond actuarial risk levels. These borrowers deserve recognition of FHA's restored financial strength through premium relief—a natural outcome when the conditions that necessitated extraordinary measures have substantially changed.

The Life of Loan MIP policy is also creating unintended market consequences that ultimately undermine the purpose of FHA programs. FHA borrowers seeking to refinance to take advantage of their equity position or lower interest rates are being forced to leave the FHA program and transition to conventional financing in order to avoid perpetual mortgage insurance costs. This migration is placing additional strain on Fannie Mae and Freddie Mac, who are absorbing loans that would naturally remain within the FHA system absent this policy barrier. Restoring traditional MIP cancellation at 78 percent LTV would strengthen FHA's loan portfolio and reduce unnecessary pressure on the government-sponsored enterprises.

Homeownership is already challenging for many American families. Allowing qualified borrowers to achieve MIP cancellation at the traditional 78 percent LTV threshold would reduce monthly payments, increase home affordability, and stabilize market dynamics—all while maintaining the integrity and strength of the FHA program.

NAMB urges the FHA to implement this commonsense reform that benefits borrowers and supports market stability while preserving FHA's robust capital position.