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.

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.



comments powered by Disqus
Hot Definitions
  1. Gross Debt Service Ratio - GDS

    A debt service measure that financial lenders use as a rule of thumb to give a preliminary assessment about whether a potential borrower is already in too much debt. Receiving a ratio of less than 30% means that the potential borrower has an acceptable level of debt.
  2. Federal Reserve Note

    The most accurate term used to describe the paper currency (dollar bills) circulated in the United States. These Federal Reserve Notes are printed by the U.S. Treasury at the instruction of the Federal Reserve member banks, who also act as the clearinghouse for local banks that need to increase or reduce their supply of cash on hand.
  3. Benchmark Bond

    A bond that provides a standard against which the performance of other bonds can be measured. Government bonds are almost always used as benchmark bonds. Also referred to as "benchmark issue" or "bellwether issue".
  4. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying a company's shares outstanding by the current market price of one share. The investment community uses this figure to determine a company's size, as opposed to sales or total asset figures.
  5. Oil Reserves

    An estimate of the amount of crude oil located in a particular economic region. Oil reserves must have the potential of being extracted under current technological constraints. For example, if oil pools are located at unattainable depths, they would not be considered part of the nation's reserves.
  6. Joint Venture - JV

    A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses and costs associated with it.
Trading Center