According to the executive order, FHA will cut .5 percent from the annual premium for the FHA backed loans with terms greater than 15yrs on FHA case numbers issued after January, 26, 2015. For most FHA loans this will reduce the annual premium from 1.35 percent of the loan balance to .85 percent. Loans with balances above the loan limits in effect in most areas and with current MIP of 1.50 to 1.55 percent will see new premiums of 1.00 or 1.05 percent respectively. The upfront premium for all loans will remain unchanged at 1.75 percent.

Borrowers that have recently closed an FHA loan there will be no immediate recourse. They will have to wait the mandatory 210 day period and have made six monthly payments on their existing FHA loan before they are able to refinance through a streamline loan in order to secure the lower MIP.

The reduced premiums will be unavailable on loans with terms of 15 years or less (the annual MIP for those loans is already less than the new MIP amounts for 30yr loans). Also, the reductions DO NOT apply to streamline refinancing of existing FHA loans that were endorsed on or before May 31, 2009 (these also have lower MIP already at .55)