FHA Insurance

FHA insurance is a mortgage insurance required for loans backed by the Federal Housing Administration (FHA). It protects the lender in case the borrower defaults on the loan. Borrowers pay an upfront premium at closing and ongoing monthly premiums, which allow individuals with lower credit scores or smaller down payments to qualify for home financing. This insurance provides lenders with confidence to offer more flexible lending terms, making homeownership more accessible. It’s important to note that FHA insurance is different from private mortgage insurance (PMI) and remains until the loan is paid off or reaches a certain equity level.