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**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.