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 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. Credit & Loans

    What are the pros and cons of owning an equity REIT versus a mortgage REIT?

    Learn about investing in equity, mortgage and hybrid REITs. Explore the different strategies REITs employ to generate income and create dividends.
  6. Credit & Loans

    What is the debt ratio for an FHA loan?

    Borrowing through the Federal Housing Administration requires individuals to provide proof of income as well as information relating to total outstanding debt.
  7. Home & Auto

    What factors should I consider when shopping for the best mortgage lender?

    Comparing lenders to obtain the best mortgage loan requires research and willingness to shop around for the best loan to fit individual needs.
  8. Credit & Loans

    Buying A House? Avoid These 7 Mistakes

    Owning your own home gives you a feeling of independence that renting can’t offer, and there are big financial benefits, too.
  9. Professionals

    Should Your Retiring Clients Pay Off A Mortgage?

    Should your retiring clients pay off their mortgages? It's more complicated than 'yes' or 'no,' so here's a quick guide.
  10. 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.

You May Also Like

Hot Definitions
  1. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  2. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
  3. Fixed Asset

    A long-term tangible piece of property that a firm owns and uses in the production of its income and is not expected to be ...
  4. Break-Even Analysis

    An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even ...
  5. Key Performance Indicators - KPI

    A set of quantifiable measures that a company or industry uses to gauge or compare performance in terms of meeting their ...
  6. Bank Guarantee

    A guarantee from a lending institution ensuring that the liabilities of a debtor will be met. In other words, if the debtor ...
Trading Center