Why agents care
FHA buyers need the MIP in their payment estimate, and its duration matters when they compare FHA with a conventional loan. Getting this right on FHA-friendly listings builds credibility with first-time buyers.
Glossary term
FHA MIP
FHA mortgage insurance premium (MIP) has two parts: an upfront premium, usually financed into the loan, and an annual premium paid monthly. HUD sets the rates. With less than 10% down, the annual premium typically lasts for the life of the loan, unlike conventional PMI.
Example
Example: at the upfront rate of 1.75% (HUD, effective March 2023), a $410,000 base loan carries about $7,175 in upfront MIP, usually added to the loan amount.
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Questions by topic
FHA MIP: common questions
Can FHA MIP be removed?
With 10% or more down, annual MIP generally ends after 11 years. With less, it typically lasts the life of the loan unless the borrower refinances.
Is the upfront MIP paid in cash?
It can be, but it's usually financed into the loan.
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