Home Ownership for all Americans is the goal of The Department of Housing and Urban Development. HUD foreclosure homes were purchased with a FHA (Federal Housing Administration) loan. Loans insured by the Federal Government make good investments for lenders because they are 100% assured that the Federal Government will pay the loan, should the home owner default on their loan. The Federal government protects itself by collecting a Mortgage Insurance Premium (MIP) on FHA loan properties. This MIP may be collected upfront or may be a monthly fee charged to the buyer on their loans to insure the lender against monetary loss, should the property go into forclosure. It is because of Mortgage Insurance Premiums that The Department of Housing and Urban Development can discount HUD foreclosure homes.
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