FHA mortgage loans are provided by FHA-approved lenders, these are US Federal Housing Administration mortgage insurance backed mortgage loans. A kind of federal assistance, FHA insured loans have traditionally allowed lower income Americans to borrow money for the purchase of a home they would not otherwise be able to afford. In order to obtain mortgage insurance from the Federal Housing Administration, an upfront mortgage insurance premium (UFMIP) equal to 1.75 percent of the base loan amount at closing is required. This is typically financed into the total loan amount by the lender and paid on behalf of the borrower to the FHA. In addition there is also a monthly mortgage insurance premium (MIP). This varies based on the amortization term as well as the loan-to-value ratio. FHA mortgages make up a part of the Federal Housing Administration products that Redwood’s portfolio features.