Mortgage Insurance Premium (MIP) is required for which loan program?

Mortgage Insurance Premium (MIP) is required for which loan program?

• A. FHA loans
• B. Conventional loans
• C. VA loans
• D. USDA loans

Answer: (A)

Mortgage Insurance Premium is a feature tied to FHA financing. FHA loans require both an upfront MIP (paid at closing or financed) and ongoing monthly MIP for many loan scenarios, providing lender protection and enabling lower down payments. Conventional loans use private mortgage insurance (PMI) only when the down payment is below 20%, and it can often be canceled later. VA loans do not require mortgage insurance, though they have a separate funding fee, and USDA loans use a different guarantee fee rather than MIP. So, the loan program that requires Mortgage Insurance Premium is FHA loans.

Mortgage Insurance Premium is a feature tied to FHA financing. FHA loans require both an upfront MIP (paid at closing or financed) and ongoing monthly MIP for many loan scenarios, providing lender protection and enabling lower down payments. Conventional loans use private mortgage insurance (PMI) only when the down payment is below 20%, and it can often be canceled later. VA loans do not require mortgage insurance, though they have a separate funding fee, and USDA loans use a different guarantee fee rather than MIP. So, the loan program that requires Mortgage Insurance Premium is FHA loans.