Key facts
- Ginnie Mae President Joe Gormley indicated the Trump administration is comfortable with current mortgage insurance premiums for FHA single-family and reverse mortgages.
- NRMLA will continue to advocate for changes to the upfront MIP for federally insured reverse mortgages.
- NRMLA believes a risk-based pricing structure for HECM premiums would improve the program.
- The current upfront MIP is the lesser of 2% of the home's appraised value or 2% of the maximum lending limit.
- NRMLA estimated that about 25% of potential HECM originations have been lost since risk-based pricing was eliminated in late 2017.
- FHA reported a capital ratio of 11.47% for its MMI Fund at the end of fiscal year 2025.
Ginnie Mae President Joe Gormley recently stated that the Trump administration is comfortable with the current structure of mortgage insurance premiums (MIPs) for FHA single-family home loans and reverse mortgages. These comments have prompted the National Reverse Mortgage Lenders Association (NRMLA) to reaffirm its commitment to advocating for changes to the upfront MIP for Home Equity Conversion Mortgages (HECMs).
In an interview, Gormley indicated that while MIPs were reduced for FHA's multifamily lending program, the single-family programs' fees remain unchanged. NRMLA President Steve Irwin responded that the association sees continued opportunities for dialogue with the FHA regarding modernization of premium structures and the implementation of more risk-based pricing for reverse mortgages.
NRMLA previously submitted comments to the Department of Housing and Urban Development (HUD) in December, estimating that approximately 25% of potential HECM originations have been lost since the FHA eliminated risk-based pricing in late 2017. The trade group has proposed returning to a structure where borrowers who initially withdraw 60% or less of the principal limit factor would pay a 0.5% upfront fee, with a potential increase in the annual MIP to cover actuarial losses. NRMLA emphasized that any proposal would not endanger the soundness of the FHA's Mutual Mortgage Insurance Fund (MMI Fund), which ended fiscal year 2025 with a capital ratio of 11.47%, well above its statutory minimum.
Irwin also indicated that NRMLA anticipates working with Matt Jones, the nominee for FHA commissioner, on potential changes to federal reverse mortgage offerings. Meanwhile, an anonymous HECM lender source suggested that while demand for reverse mortgages is growing, HUD and FHA are not adequately prepared to meet it, and that the upfront MIP charge is perceived as too high by originators, financial advisors, and consumers.