C.F.R. » Title 24 » CHAPTER II—OFFICE OF ASSISTANT SECRETARY FOR HOUSING—FEDERAL HOUSING COMMISSIONER, DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT › SUBCHAPTER B—MORTGAGE AND LOAN INSURANCE PROGRAMS UNDER NATIONAL HOUSING ACT AND OTHER AUTHORITIES › PART 206—HOME EQUITY CONVERSION MORTGAGE INSURANCE › Subpart C—Contract Rights and Obligations

24 C.F.R. § 206.105

Amount of MIP

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(a) Initial MIP. The mortgagee shall pay to the Commissioner an initial MIP that does not exceed three percent of the maximum claim amount.

(b) Monthly MIP. The Commissioner may establish and collect a monthly MIP, which will accrue daily from the closing date, at a rate not to exceed 1.50 percent of the remaining insured principal balance, or up to 1.55 percent for any mortgage involving an original principal obligation that is greater than 95 percent of appraised value of the property. A mortgagee may only add the monthly MIP to the loan balance when paid to the Commissioner.

(c) Calculation of the initial MIP. The mortgagee shall calculate the initial MIP based on the amount of funds the borrower has elected to be made available during the First 12-Month Disbursement Period, except that the calculation shall not include any funds set aside in the Servicing Fee Set Aside, if applicable. The initial MIP calculation shall be determined based on the sum of the following amounts:

(1) For adjustable interest rate HECMs, the amount of Mandatory Obligations, the amount disbursed to the borrower at loan closing, and the amount of the available Initial Disbursement Limit not taken by the borrower at loan closing that the borrower selects to remain available during the First 12-Month Disbursement Period.

(2) For fixed interest rate HECMs, the amount of Mandatory Obligations and the amount disbursed to the borrower at loan closing.

(d) Adjustments to initial or monthly MIP. The Commissioner may adjust the amount of any initial or monthly MIP through notice. Such notice shall establish the effective date of any premium adjustment therein.

Notes of Decisions
Cited in 2 cases (1 in the last 5 years), 2011–2022 · leading case: The Sec'y of the U.S. Dep't of Hous. & Urban Dev. v. Gilbert (N.D.N.Y. 2022).
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The Sec'y of the U.S. Dep't of Hous. & Urban Dev. v. Gilbert (N.D.N.Y. 2022). “34 (Set forth in 24 CFR 206.105; 24 CFR 206.27(7); 206.103 et seq.”
Taft v. Wells Fargo Bank, N.A., 828 F. Supp. 2d 1031 (D. Minnesota 2011). “24 C.F.R. §§ 206.105 (a); 206.103. The regulations contemplate the borrower either borrowing the money for this initial insurance premium payment, in which case that money logically would be added to the principal balance, or making the payment in cash.”
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