Mutual Mortgage Insurance Fund

DEFINITION of 'Mutual Mortgage Insurance Fund'

A fund that insures mortgages made by the Federal Housing Administration (FHA) on single-family homes. Mortgagors pay into the fund with a one-time premium of 1.5% of the loan amount, paid at closing, and annual mortgage-insurance premiums of 0.5% of the loan amount, which must be paid until the mortgagor has 22% equity in the home.

The Mutual Mortgage Insurance Fund pays the lender if the mortgagor defaults. Borrowers who have FHA mortgages are considered higher risk because of the low down-payment requirement and looser income and credit requirements on FHA loans.

BREAKING DOWN 'Mutual Mortgage Insurance Fund'

The Mutual Mortgage Insurance Fund is authorized by Section 203(b) of the National Housing Act of 1934. The other funds operated by the FHA are the Cooperative Management Housing Insurance Fund, the General Insurance Fund and the Special Risk Insurance Fund.

RELATED TERMS
  1. Federal Housing Administration ...

    A United States government agency that provides mortgage insurance ...
  2. FHA Loan

    A mortgage issued by federally qualified lenders and insured ...
  3. Up-Front Mortgage Insurance - UFMI

    An insurance premium that is collected, typically on Federal ...
  4. Qualified Mortgage Insurance Premium

    Premium paid by homeowners on mortgage insurance for FHA loans ...
  5. Annual Mortgage Statement

    An annual report sent to a mortgagor by the mortgagee's servicer ...
  6. Option Adjustable-Rate Mortgage ...

    A type of mortgage where the mortgagor (borrower) has several ...
Related Articles
  1. Home & Auto

    Is An FHA Mortgage Still A Bargain?

    Borrowers initially flocked to FHA loans due to their low down payments and accessibility for people with low credit scores.
  2. Home & Auto

    7 Things To Know About FHA Home Loans

    Federally qualified lenders issue FHA loans, and the Federal Housing Administration insures them.
  3. Credit & Loans

    Why Choose an FHA Jumbo Mortgage Over Other Jumbos?

    Housing prices are through the roof in the locale where you’d like to live. How will you afford to buy? One of these home loans may be the answer.
  4. Home & Auto

    HUD vs. FHA Loans: What’s the Difference?

    Sometimes these terms are used interchangeably to refer to "government loans" for would-be home buyers. But here's the distinction.
  5. Credit & Loans

    Millennials Guide: How to Pick the Right Mortgage

    Here’s help in finding the perfect, affordable loan for that home you have been dreaming about.
  6. Home & Auto

    This New Mortgage Only Requires 3% Down

    A new low-down-payment mortgage offering has attractive features, but be sure to check out all the options and get the whole story before you sign up.
  7. Credit & Loans

    Guidelines for FHA Reverse Mortgages

    FHA guidelines protect borrowers from major mistakes, prevent lenders from taking advantage of borrowers and encourage lenders to offer reverse mortgages.
  8. Savings

    Where To Get A Mortgage If You Have Bad Credit

    Here's where to go if you have a low credit score and still want a mortgage.
  9. Credit & Loans

    Is it Worth Saving Up for a Bigger Down Payment?

    There are numerous low-down-payment mortgage options out there, but sometimes it makes sense to build up your savings so you can borrow less.
  10. Credit & Loans

    When You Need a Jumbo or Super-Jumbo Mortgage

    Rising housing prices have made so-called jumbo and super-jumbo loans a necessity for more homebuyers.
RELATED FAQS
  1. Do FHA loans have closing costs?

    Learn about Federal Housing Administration loans and how financial institutions that issue FHA mortgages charge borrower ... Read Answer >>
  2. Do FHA loans require mortgage insurance?

    Learn about FHA loans that require borrowers to pay an upfront mortgage insurance premium and subsequent monthly mortgage ... Read Answer >>
  3. Do banks offer FHA loans?

    Learn how banks approved by the U.S. Federal Housing Administration offer FHA loans with lower down payment requirements ... Read Answer >>
  4. Does an FHA loan require a down payment?

    Learn about Federal Housing Administration (FHA) loans, which have down payments as low as 3.5%, low closing costs and lower ... Read Answer >>
  5. What are the requirements for an FHA loan?

    Qualify for homeownership with an FHA-backed mortgage. Borrowers with imperfect credit benefit from this government-sponsored ... Read Answer >>
  6. Are FHA loans fixed?

    Learn more about Federal Housing Authority (FHA) loan programs, the requirements for qualifying and how such loans can be ... Read Answer >>
Hot Definitions
  1. Physical Capital

    Physical capital is one of the three main factors of production in economic theory. It consists of manmade goods that assist ...
  2. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  3. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  4. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  5. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  6. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
Trading Center