An FHA Loan is a mortgage insured by the Federal Housing Administration. Overseen by the Administration of Housing and Urban Development. Borrowers with FHA loans pay for mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan. FHA loans do not come directly from the FHA, they insure these loans.
Mortgage Insurance Premiums Explained (there are 2 of them) [source: www.portal.hud.gov]
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