Assuming an FHA Loan - PMI Carried Over/Able to be Removed?
Hello All,
I may be selling a triplex in a few months that has an FHA loan attached to it. Note this FHA loan was originated before the June 2013 change that makes PMI last the life of the loan. Instead, since it was originated before June 2013, the loan has the option of removing PMI after 20% is paid down AND 5 years has passed from loan origination date.
My question is, if a potential buyer of my triplex would like to 'assume' the FHA Loan that still has the PMI (i.e. being sold before the 5 years is up), does:
a.) The buyer still have to pay PMI if the appraised value during sale exceeds the loan amount such that the loan amount is <= 80% equity
b.) If the assumed loan has PMI, is the 'option of removing PMI' ability grandfathered into the loan?
c.) Does the start date of the PMI counter (5 year counter) still remain the loan origination date or is it now the start date of the buyer's assumption of the FHA loan?
I can't seem to find these answers on the internet. Someone out there must have bumped into this question at some point! Thanks!