Bill > HR5508

This bill, known as the "Mortgage Insurance Freedom Act", amends the National Housing Act to restrict the collection of annual mortgage insurance premiums (MIP) when a borrower's mortgage balance reaches 78% or less of the original home value or sales price. Specifically, the Secretary of Housing and Urban Development (HUD) will be prohibited from collecting these annual premiums once the remaining insured principal balance meets this threshold. However, an exception exists if the Mutual Mortgage Insurance Fund's capital ratio falls below 2%, in which case the Secretary can continue collecting premiums for existing mortgages. The bill requires HUD to develop a process for homeowners to demonstrate their mortgage balance has reached the 78% threshold and to conduct outreach and educational activities to inform mortgagors about these new premium collection restrictions. The changes will only apply to mortgages endorsed for insurance by HUD after the Act's enactment, meaning existing mortgages will not be immediately affected. This legislation aims to provide financial relief for homeowners by eliminating unnecessary mortgage insurance premiums once a significant portion of the home's value has been paid off.

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https://www.congress.gov/bill/119th-congress/house-bill/5508/all-info