No. There is a one-time guarantee fee charged by Rural Development that can always be financed into the loan.

This is generally required in one form or another when the down payment is less than 20%, and protects the lender in the event of loan default. The lower the down payment, the higher the risk for the lender, and thus the higher the monthly premium. Depending on your particulars, there are ways in which mortgage insurance can sometimes be avoided at purchase, or dropped altogether at some point in the future. Back to List

Because the FHA loan is a government insured program, the MIP (mortgage insurance) premiums a homeowner pays cannot be canceled regardless of the loan to value ratio that results from paying down the mortgage principle or natural home appreciation.? These premiums are designed to ensure the solvency of the FHA program and facilitates the financing of other homebuyers just like you.

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