MIP: Mortgage Insurance Premiums in Relation to HUD 223f Loans

HUD 223f Loans and Mortgage Insurance Premiums (MIPs)

Before being approved for HUD Multifamily loans, like the HUD 223(f) loan, a borrower must have mortgage insurance. HUD-requires borrowers to pay MIP (Mortgage Insurance Premium) on FHA loans. This insurance policy is not to be confused with PMI (private mortgage insurance) which is required on some conventional mortgage loans.

How HUD 223(f) Borrowers Pay MIP 

MIP is paid both as a one-time cost and as an annual payment:

  • One-time MIP: 1% of the total loan amount, paid at closing as the first year’s MIP.

  • Annual MIP: Each following year, the MIP is 0.60% of the loan amount. Affordable properties receive an adjusted rate of 0.45%, while properties with a Green MIP reduction receive discounted rate of 0.25%. Interest rates on these payments range between 4.10% and 4.75% (with MIP included).


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