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. Up-Front Mortgage Insurance - UFMI

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

    Premium paid by homeowners on mortgage insurance for FHA loans ...
  4. Home Equity Conversion Mortgage ...

    A type of Federal Housing Administration (FHA) insured reverse ...
  5. Interest-Only Mortgage

    A type of mortgage in which the mortgagor is only required to ...
  6. Uninsurable Property

    A home that is not eligible for insurance through the United ...
Related Articles
  1. Investing

    Before You Choose An FHA Mortgage: 7 Key Points

    FHA mortgages offer flexibility and low down payments, though they're often pricier than traditional loans backed by private mortgage insurance.
  2. Personal Finance

    Is An FHA Mortgage Still A Bargain?

    If you're putting down less than 20%, the FHA's mortgage insurance premium could cost you more than private mortgage insurance with a commercial lender.
  3. Personal Finance

    Insuring Federal Housing Authority Mortgages

    This insurance has an edge over private mortgage insurance. Find out why.
  4. Personal Finance

    Top Reasons To Apply For An FHA Loan

    When is it a good idea to apply for a Federal Housing Administration loan?
  5. Personal Finance

    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.
  6. Personal Finance

    Mortgage for a Manufactured Home? Try the FHA

    FHA loans are often a good alternative for those who have trouble obtaining a conventional mortgage, although you do have to pay an insurance premium.
  7. Personal Finance

    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.
  8. Personal Finance

    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.
  9. Personal Finance

    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.
  10. Investing

    Financing Basics For First-Time Homebuyers

    If you're looking to get your first mortgage, there are many financing options available.
RELATED FAQS
  1. 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 >>
  2. What's the difference between FHA and conventional loans?

    Conventional mortgages require higher credit scores than FHA mortgages. Read Answer >>
  3. How many FHA loans can I have?

    Discover how many FHA-insured loans an individual may have, and learn about some of the exceptions, such as relocation and ... Read Answer >>
  4. Are FHA loans assumable?

    Learn the advantages and disadvantages of assuming an FHA-insured mortgage. Assuming loans with lower interest rates can ... Read Answer >>
  5. Does the FHA provide construction loans?

    Learn how you can save with FHA-insured construction and rehabilitation mortgages that allow you to finance construction ... Read Answer >>
Hot Definitions
  1. Trumponomics

    Trumponomics is a term for the economic policies of President-elect Donald Trump.
  2. Universal Health Care Coverage

    An organized healthcare system that provides healthcare benefits to all persons in a specified region. Many countries, such ...
  3. Davos World Economic Forum

    The annual meeting of the World Economic Forum hosted at Davos—a small ski town in Switzerland—in January each year is among ...
  4. Smart Home

    A convenient home setup where appliances and devices can be automatically controlled remotely from anywhere in the world ...
  5. Efficient Frontier

    A set of optimal portfolios that offers the highest expected return for a defined level of risk or the lowest risk for a ...
  6. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
Trading Center