When taking a home loan backed by the new Government Property Power (FHA) or even the U.S. Agency out of Farming (USDA), anticipate to spend financial premium (MIP). MIP is actually an additional expense meant to cover the lending company inside instance your standard on the money. Which additional percentage allows lowest in order to reasonable income consumers to get a home loan once they do not qualify for antique financing. It will be the lose homebuyers alllow for the low downpayment alternative and you may casual borrowing standards. MIP is actually paid down each other while the an upfront commission and an annual commission having FHA and you may USDA money.