There is still much confusion about FHA loans, so we are addressing two issues today: (1) getting out of MI; and (2) if FHA loans are ‘assumable’.
You can get out of FHA MI, but ONLY after a minimum of five years, and ONLY if your LTV drops to 78% or below. Many loan officers and borrowers mistakenly believe that FHA MI is permanent.
Further, all 30 Year Fixed Rate FHA loans are assumable (at least with our lenders). We have actually gone so far to check the promissory notes to make sure. The assuming borrowers must, however, be able to qualify for the loan.
The assumption clause makes FHA financing extremely enticing if rates should go up as much as expected in future years.