What Is the FHA Initial Mortgage Insurance Premium?

When you take out a reverse mortgage through the Federal Housing Administration (FHA), you’ll pay a one-time insurance fee – known as the Initial MIP.

This fee:

• Equals 2% of your home’s appraised value (or the FHA loan limit — whichever is lower)
• Is added to your loan balance, not paid upfront
• Protects you by guaranteeing you’ll never owe more than your home is worth when the loan is repaid

It’s a built-in safeguard — not an extra burden.

How It Works

Here’s a simple example:

• Home value: $300,000
• Initial MIP: $6,000 (2% × $300,000)
• You borrow $150,000
• New balance at closing: $156,000 (loan + MIP)

It’s really that simple!

Why FHA Insurance Exists

Reverse mortgages are federally insured to protect both borrowers and lenders.

This insurance guarantees that:

• You or your heirs will never owe more than the home’s value
• You’ll continue receiving your payments even if the lender changes hands
• You remain protected if your loan outlives the home’s value

Think of it as a lifetime safety net built into your loan.

Want to Skip This Fee Entirely?

Some homeowners qualify for our HomeForLife program – a new alternative to FHA reverse mortgages.

With HomeForLife, you can enjoy:

• No initial MIP
• Flexible income and credit requirements
• Lower age thresholds
• More accessible equity options

Compare your options here

If you’re not sure which is right for you, our licensed specialists can walk you through both side-by-side.

Frequently Asked Questions

Still have questions? We have answers.

How is the MIP calculated?

It’s 2% of your home’s value (or the FHA loan limit, whichever is lower). For homes valued above $1,209,750, the fee caps at $24,195.

Do I have to pay it out of pocket?

No. The MIP is rolled into your reverse mortgage balance at closing — meaning no upfront payment is required.

Is there also an annual MIP?

Yes. FHA reverse mortgages include a small 0.5% annual insurance fee added to your loan balance over time.

What if my home is worth more than the FHA limit?

Your initial MIP is based only on the FHA limit — not your full home value. This helps keep costs predictable.

Get Your Personalized Estimate

Understanding your upfront FHA costs is the first step toward a stress-free retirement plan.

Our team can help you see exactly how your MIP affects your available loan proceeds — and whether HomeForLife could save you thousands.

Call Now at (844) 230-6679

Or…

Request My Free Cost Breakdown →