Do HUD 232 Loans Require Mortgage Insurance (MIP)?

Do You Need Mortgage Insurance for a HUD 232 Loan?

Yes, HUD 232 loans require borrowers to pay a Mortgage Insurance Premium (MIP), as both a one-time and an annual expense. MIP for these loans includes a 1% one time MIP assessment, payable at closing, and a 0.65% (65 basis points) annual MIP charge, paid each year for market rate properties.

What is MIP?

For conventional mortgages, borrowers pay mortgage insurance when their down payment is less than 20% of the property cost. However, HUD requires borrowers to pay MIP. It is both a one-time payment and an annual cost. In addition to the 0.65% MIP for market rate properties, HUD allows the following adjustments:

  • 0.45% (45 basis points) for Section 8 or new money LIHTC properties

  • 0.70% (70 basis points) for Section 220 urban renewal projects (non-Section 8 and non-LIHTC projects)


To learn more about FHA 232 loans, fill out the form below to speak to a HUD/FHA loan expert.