Mutual Mortgage Insurance Fund

AAA

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.

INVESTOPEDIA EXPLAINS '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. Bank Insurance Fund (BIF)

    A unit of the FDIC that provides insurance protections for banks ...
  2. National Housing Act

    Federal legislation passed in 1934 to create the Federal Housing ...
  3. Mortgage Insurance

    An insurance policy that protects a mortgage lender or title ...
  4. Up-Front Mortgage Insurance - UFMI

    An insurance premium that is collected, typically on Federal ...
  5. Default

    1. The failure to promptly pay interest or principal when due. ...
  6. Mortgagor

    An individual or company who borrows money to purchase a piece ...
RELATED FAQS
  1. What is the difference between "closed end credit" and a "line of credit?"

    Depending on the need, an individual or business may take out a form of credit that is either open- or closed-ended. While ... Read Full Answer >>
  2. In what instances does a business use closed end credit?

    The most common types of closed-end credit used by both businesses and individuals are mortgages and auto loans. Businesses ... Read Full Answer >>
  3. What are the long-term effects of delinquent accounts?

    Delinquency occurs when borrowers fail to make payments on their loans. All loan borrowers should do their best to avoid ... Read Full Answer >>
  4. How was the American Dream impacted by the housing market collapse in 2008?

    The American Dream was seriously damaged by the housing market collapse in 2008. In many ways, the American Dream is a self-fulfilling ... Read Full Answer >>
  5. How much risk is associated with subprime mortgages?

    A large amount of risk is associated with subprime mortgages. Since the mortgages are specifically for people who do not ... Read Full Answer >>
  6. What are the financial consequences of filing for bankruptcy?

    The financial consequences of filing for bankruptcy are substantial and can be long-lasting. They include impacts on your ... Read Full Answer >>
Related Articles
  1. Retirement

    Understanding FHA Home Loans

    Don't be overwhelmed when filling out these forms. Find out what you need to do here.
  2. Home & Auto

    6 Reasons To Avoid Private Mortgage Insurance

    This costly coverage protects your mortgage lender - not you.
  3. Home & Auto

    Insuring Federal Housing Authority Mortgages

    This insurance has an edge over private mortgage insurance. Find out why.
  4. Home & Auto

    How To Outsmart Private Mortgage Insurance

    It's possible to use a second mortgage to avoid this fee, but is it in your best interest?
  5. Insurance

    Do You Need Kidnap & Ransom Insurance?

    Americans working abroad – and high-profile individuals traveling frequently in kidnapping hot spots – should consider this type of protection.
  6. Insurance

    A Guide To Kidnap & Ransom Insurance

    Every year, thousands of people are kidnapped for ransom all over the world. This insurance offers protection – and peace of mind.
  7. Economics

    What is a Subprime Mortgage?

    Subprime mortgages are offered to borrowers with low credit ratings, usually 600 or below.
  8. Insurance

    Should I Insure My Wedding Ring?

    It depends, in part, on the ring's value and your current insurance coverage. Here's a guide to making a decision that's right for you.
  9. Insurance

    How To Insure Your Wedding Ring

    Read on for everything you need to know to make sure this precious possession is covered against theft, damage, loss and more.
  10. Professionals

    How Advisors Can Help When a Service Member Dies

    Finances are probably last thing that survivors of our nation’s deceased service members want to deal with. Here's what advisors can do to help.

You May Also Like

Hot Definitions
  1. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  2. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  5. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
  6. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!