In real estate finance, an Insured Mortgage is a loan that is protected by insurance against loss to the lender if the borrower defaults and the property does not generate enough proceeds at foreclosure to cover the outstanding balance and related costs. This insurance reduces the lender’s risk in making the loan.
Insured mortgages are commonly associated with government programs, such as those backed by the Federal Housing Administration or similar agencies. By providing insurance coverage, these programs help make mortgage financing more accessible to borrowers who may not qualify for conventional loans.
