Which loan program uses MIP?

Prepare for the Qualified and Non-Qualified Mortgage Test with comprehensive flashcards and multiple-choice questions. Ensure you understand every concept with detailed hints and explanations.

Multiple Choice

Which loan program uses MIP?

Explanation:
Mortgage Insurance Premium, or MIP, is a cost tied specifically to FHA loans to protect lenders when the borrower makes a small down payment. Because FHA loans are insured by the government, MIP helps cover lenders against losses. MIP is paid as part of the monthly payment, and an upfront portion can also be charged and financed into the loan. Among common loan programs, this feature belongs to FHA loans. Conventional loans may require private mortgage insurance (PMI) if the down payment is less than 20%, but that is PMI, not MIP. USDA loans use a guarantee fee and an annual fee rather than MIP, and VA loans typically do not require mortgage insurance at all (though they may have a one-time funding fee).

Mortgage Insurance Premium, or MIP, is a cost tied specifically to FHA loans to protect lenders when the borrower makes a small down payment. Because FHA loans are insured by the government, MIP helps cover lenders against losses. MIP is paid as part of the monthly payment, and an upfront portion can also be charged and financed into the loan. Among common loan programs, this feature belongs to FHA loans. Conventional loans may require private mortgage insurance (PMI) if the down payment is less than 20%, but that is PMI, not MIP. USDA loans use a guarantee fee and an annual fee rather than MIP, and VA loans typically do not require mortgage insurance at all (though they may have a one-time funding fee).

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