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FHA Loan worksheet

Grades 11–12 · CCSS HSA.SSE.B.4

Solve each problem and show your work. Round answers to 2 decimal places where needed.

1.
Problem 1.
- Home price: $250,000
- Down payment: 10% of price
- Credit score: 580 or higher
- Interest rate: 5.1% per year
- Loan term: 20 years
- Add the upfront MIP to the loan: Yes
- Property tax: $4,000 per year
- Home insurance: $1,400 per year
Find: Total monthly payment (year 1)
Answer
2.
Problem 2.
- Home price: $225,000
- Down payment: 5% of price
- Credit score: 580 or higher
- Interest rate: 6% per year
- Loan term: 15 years
- Add the upfront MIP to the loan: Yes
- Property tax: $3,200 per year
- Home insurance: $1,400 per year
Find: Total monthly payment (year 1)
Answer
3.
Problem 3.
- Home price: $200,000
- Down payment: 5% of price
- Credit score: 580 or higher
- Interest rate: 5.6% per year
- Loan term: 30 years
- Add the upfront MIP to the loan: Yes
- Property tax: $4,000 per year
- Home insurance: $900 per year
Find: Total monthly payment (year 1)
Answer
4.
Problem 4.
- Home price: $320,000
- Down payment: 10% of price
- Credit score: 580 or higher
- Interest rate: 7% per year
- Loan term: 15 years
- Add the upfront MIP to the loan: Yes
- Property tax: $3,000 per year
- Home insurance: $1,800 per year
Find: Total monthly payment (year 1)
Answer
5.
Problem 5.
- Home price: $335,000
- Down payment: 10% of price
- Credit score: 500 to 579
- Interest rate: 6.2% per year
- Loan term: 15 years
- Add the upfront MIP to the loan: Yes
- Property tax: $2,800 per year
- Home insurance: $1,900 per year
Find: Total monthly payment (year 1)
Answer
6.
Problem 6.
- Home price: $270,000
- Down payment: 10% of price
- Credit score: 500 to 579
- Interest rate: 5.5% per year
- Loan term: 15 years
- Add the upfront MIP to the loan: Yes
- Property tax: $4,000 per year
- Home insurance: $1,800 per year
Find: Total monthly payment (year 1)
Answer
7.
Problem 7.
- Home price: $275,000
- Down payment: 3.5% of price
- Credit score: 580 or higher
- Interest rate: 6% per year
- Loan term: 30 years
- Add the upfront MIP to the loan: Yes
- Property tax: $2,600 per year
- Home insurance: $1,850 per year
Find: Total monthly payment (year 1)
Answer
8.
Problem 8.
- Home price: $300,000
- Down payment: 10% of price
- Credit score: 580 or higher
- Interest rate: 6.5% per year
- Loan term: 20 years
- Add the upfront MIP to the loan: Yes
- Property tax: $3,200 per year
- Home insurance: $2,100 per year
Find: Total monthly payment (year 1)
Answer
9.
Problem 9.
- Home price: $380,000
- Down payment: 10% of price
- Credit score: 500 to 579
- Interest rate: 4.7% per year
- Loan term: 20 years
- Add the upfront MIP to the loan: Yes
- Property tax: $3,500 per year
- Home insurance: $1,500 per year
Find: Total monthly payment (year 1)
Answer
10.
Problem 10.
- Home price: $260,000
- Down payment: 10% of price
- Credit score: 500 to 579
- Interest rate: 5.7% per year
- Loan term: 15 years
- Add the upfront MIP to the loan: Yes
- Property tax: $3,800 per year
- Home insurance: $1,500 per year
Find: Total monthly payment (year 1)
Answer

Answer key: FHA Loan worksheet

1. Total monthly payment (year 1): $2,066.05
1. Find the base loan: the home price minus your down payment
  $$250,000.00 - $250,000.00 \times 10%$ $= $225,000.00$
2. Find the loan-to-value (LTV): how much of the price you borrow. It sets your insurance rate
  $\frac{$225,000.00}{$250,000.00}$ $= 90%$
3. Work out the upfront mortgage insurance (MIP), which is 1.75% of the base loan
  $$225,000.00 \times 1.75%$ $= $3,937.50$
4. Add the upfront MIP to the loan, since you chose to borrow it
  $$225,000.00 + $3,937.50$ $= $228,937.50$
5. Find the monthly loan payment (principal and interest). A standard formula gives the one amount that pays off the loan, with interest, in 240 months
  $\frac{$228,937.50 \times 0.00425}{1 - {(1 + 0.00425)}^{−240}}$ $= $1,523.56$
6. Look up the yearly MIP rate in HUD's table. A 20-year loan at 90% LTV, with a base loan at or under $726,200.00, pays this rate for 11 years
  $annual MIP rate$ $= 0.5%$
7. Find the monthly MIP for the first year: the rate times your average balance that year, split over 12 months
  $\frac{$221,981.34 \times 0.5%}{12}$ $= $92.49$
8. Add it all up: the loan payment, MIP, tax, insurance and HOA dues
  $$1,523.56 + $92.49 + $333.33 + $116.67 + $0.00$ $= $2,066.05$
2. Total monthly payment (year 1): $2,288.52
1. Find the base loan: the home price minus your down payment
  $$225,000.00 - $225,000.00 \times 5%$ $= $213,750.00$
2. Find the loan-to-value (LTV): how much of the price you borrow. It sets your insurance rate
  $\frac{$213,750.00}{$225,000.00}$ $= 95%$
3. Work out the upfront mortgage insurance (MIP), which is 1.75% of the base loan
  $$213,750.00 \times 1.75%$ $= $3,740.63$
4. Add the upfront MIP to the loan, since you chose to borrow it
  $$213,750.00 + $3,740.63$ $= $217,490.63$
5. Find the monthly loan payment (principal and interest). A standard formula gives the one amount that pays off the loan, with interest, in 180 months
  $\frac{$217,490.63 \times 0.005}{1 - {(1 + 0.005)}^{−180}}$ $= $1,835.31$
6. Look up the yearly MIP rate in HUD's table. A 15-year loan at 95% LTV, with a base loan at or under $726,200.00, pays this rate for the whole loan
  $annual MIP rate$ $= 0.4%$
7. Find the monthly MIP for the first year: the rate times your average balance that year, split over 12 months
  $\frac{$209,639.39 \times 0.4%}{12}$ $= $69.88$
8. Add it all up: the loan payment, MIP, tax, insurance and HOA dues
  $$1,835.31 + $69.88 + $266.67 + $116.67 + $0.00$ $= $2,288.52$
3. Total monthly payment (year 1): $1,596.86
1. Find the base loan: the home price minus your down payment
  $$200,000.00 - $200,000.00 \times 5%$ $= $190,000.00$
2. Find the loan-to-value (LTV): how much of the price you borrow. It sets your insurance rate
  $\frac{$190,000.00}{$200,000.00}$ $= 95%$
3. Work out the upfront mortgage insurance (MIP), which is 1.75% of the base loan
  $$190,000.00 \times 1.75%$ $= $3,325.00$
4. Add the upfront MIP to the loan, since you chose to borrow it
  $$190,000.00 + $3,325.00$ $= $193,325.00$
5. Find the monthly loan payment (principal and interest). A standard formula gives the one amount that pays off the loan, with interest, in 360 months
  $\frac{$193,325.00 \times 0.00466667}{1 - {(1 + 0.00466667)}^{−360}}$ $= $1,109.84$
6. Look up the yearly MIP rate in HUD's table. A 30-year loan at 95% LTV, with a base loan at or under $726,200.00, pays this rate for the whole loan
  $annual MIP rate$ $= 0.5%$
7. Find the monthly MIP for the first year: the rate times your average balance that year, split over 12 months
  $\frac{$188,859.90 \times 0.5%}{12}$ $= $78.69$
8. Add it all up: the loan payment, MIP, tax, insurance and HOA dues
  $$1,109.84 + $78.69 + $333.33 + $75.00 + $0.00$ $= $1,596.86$
4. Total monthly payment (year 1): $3,069.29
1. Find the base loan: the home price minus your down payment
  $$320,000.00 - $320,000.00 \times 10%$ $= $288,000.00$
2. Find the loan-to-value (LTV): how much of the price you borrow. It sets your insurance rate
  $\frac{$288,000.00}{$320,000.00}$ $= 90%$
3. Work out the upfront mortgage insurance (MIP), which is 1.75% of the base loan
  $$288,000.00 \times 1.75%$ $= $5,040.00$
4. Add the upfront MIP to the loan, since you chose to borrow it
  $$288,000.00 + $5,040.00$ $= $293,040.00$
5. Find the monthly loan payment (principal and interest). A standard formula gives the one amount that pays off the loan, with interest, in 180 months
  $\frac{$293,040.00 \times 0.00583333}{1 - {(1 + 0.00583333)}^{−180}}$ $= $2,633.93$
6. Look up the yearly MIP rate in HUD's table. A 15-year loan at 90% LTV, with a base loan at or under $726,200.00, pays this rate for 11 years
  $annual MIP rate$ $= 0.15%$
7. Find the monthly MIP for the first year: the rate times your average balance that year, split over 12 months
  $\frac{$282,904.10 \times 0.15%}{12}$ $= $35.36$
8. Add it all up: the loan payment, MIP, tax, insurance and HOA dues
  $$2,633.93 + $35.36 + $250.00 + $150.00 + $0.00$ $= $3,069.29$
5. Total monthly payment (year 1): $3,050.66
1. Find the base loan: the home price minus your down payment
  $$335,000.00 - $335,000.00 \times 10%$ $= $301,500.00$
2. Find the loan-to-value (LTV): how much of the price you borrow. It sets your insurance rate
  $\frac{$301,500.00}{$335,000.00}$ $= 90%$
3. Work out the upfront mortgage insurance (MIP), which is 1.75% of the base loan
  $$301,500.00 \times 1.75%$ $= $5,276.25$
4. Add the upfront MIP to the loan, since you chose to borrow it
  $$301,500.00 + $5,276.25$ $= $306,776.25$
5. Find the monthly loan payment (principal and interest). A standard formula gives the one amount that pays off the loan, with interest, in 180 months
  $\frac{$306,776.25 \times 0.00516667}{1 - {(1 + 0.00516667)}^{−180}}$ $= $2,622.02$
6. Look up the yearly MIP rate in HUD's table. A 15-year loan at 90% LTV, with a base loan at or under $726,200.00, pays this rate for 11 years
  $annual MIP rate$ $= 0.15%$
7. Find the monthly MIP for the first year: the rate times your average balance that year, split over 12 months
  $\frac{$295,796.89 \times 0.15%}{12}$ $= $36.97$
8. Add it all up: the loan payment, MIP, tax, insurance and HOA dues
  $$2,622.02 + $36.97 + $233.33 + $158.33 + $0.00$ $= $3,050.66$
6. Total monthly payment (year 1): $2,533.36
1. Find the base loan: the home price minus your down payment
  $$270,000.00 - $270,000.00 \times 10%$ $= $243,000.00$
2. Find the loan-to-value (LTV): how much of the price you borrow. It sets your insurance rate
  $\frac{$243,000.00}{$270,000.00}$ $= 90%$
3. Work out the upfront mortgage insurance (MIP), which is 1.75% of the base loan
  $$243,000.00 \times 1.75%$ $= $4,252.50$
4. Add the upfront MIP to the loan, since you chose to borrow it
  $$243,000.00 + $4,252.50$ $= $247,252.50$
5. Find the monthly loan payment (principal and interest). A standard formula gives the one amount that pays off the loan, with interest, in 180 months
  $\frac{$247,252.50 \times 0.00458333}{1 - {(1 + 0.00458333)}^{−180}}$ $= $2,020.26$
6. Look up the yearly MIP rate in HUD's table. A 15-year loan at 90% LTV, with a base loan at or under $726,200.00, pays this rate for 11 years
  $annual MIP rate$ $= 0.15%$
7. Find the monthly MIP for the first year: the rate times your average balance that year, split over 12 months
  $\frac{$238,131.29 \times 0.15%}{12}$ $= $29.77$
8. Add it all up: the loan payment, MIP, tax, insurance and HOA dues
  $$2,020.26 + $29.77 + $333.33 + $150.00 + $0.00$ $= $2,533.36$
7. Total monthly payment (year 1): $2,110.69
1. Find the base loan: the home price minus your down payment
  $$275,000.00 - $275,000.00 \times 3.5%$ $= $265,375.00$
2. Find the loan-to-value (LTV): how much of the price you borrow. It sets your insurance rate
  $\frac{$265,375.00}{$275,000.00}$ $= 96.5%$
3. Work out the upfront mortgage insurance (MIP), which is 1.75% of the base loan
  $$265,375.00 \times 1.75%$ $= $4,644.06$
4. Add the upfront MIP to the loan, since you chose to borrow it
  $$265,375.00 + $4,644.06$ $= $270,019.06$
5. Find the monthly loan payment (principal and interest). A standard formula gives the one amount that pays off the loan, with interest, in 360 months
  $\frac{$270,019.06 \times 0.005}{1 - {(1 + 0.005)}^{−360}}$ $= $1,618.90$
6. Look up the yearly MIP rate in HUD's table. A 30-year loan at 96.5% LTV, with a base loan at or under $726,200.00, pays this rate for the whole loan
  $annual MIP rate$ $= 0.55%$
7. Find the monthly MIP for the first year: the rate times your average balance that year, split over 12 months
  $\frac{$263,897.51 \times 0.55%}{12}$ $= $120.95$
8. Add it all up: the loan payment, MIP, tax, insurance and HOA dues
  $$1,618.90 + $120.95 + $216.67 + $154.17 + $0.00$ $= $2,110.69$
8. Total monthly payment (year 1): $2,601.16
1. Find the base loan: the home price minus your down payment
  $$300,000.00 - $300,000.00 \times 10%$ $= $270,000.00$
2. Find the loan-to-value (LTV): how much of the price you borrow. It sets your insurance rate
  $\frac{$270,000.00}{$300,000.00}$ $= 90%$
3. Work out the upfront mortgage insurance (MIP), which is 1.75% of the base loan
  $$270,000.00 \times 1.75%$ $= $4,725.00$
4. Add the upfront MIP to the loan, since you chose to borrow it
  $$270,000.00 + $4,725.00$ $= $274,725.00$
5. Find the monthly loan payment (principal and interest). A standard formula gives the one amount that pays off the loan, with interest, in 240 months
  $\frac{$274,725.00 \times 0.00541667}{1 - {(1 + 0.00541667)}^{−240}}$ $= $2,048.28$
6. Look up the yearly MIP rate in HUD's table. A 20-year loan at 90% LTV, with a base loan at or under $726,200.00, pays this rate for 11 years
  $annual MIP rate$ $= 0.5%$
7. Find the monthly MIP for the first year: the rate times your average balance that year, split over 12 months
  $\frac{$266,916.64 \times 0.5%}{12}$ $= $111.22$
8. Add it all up: the loan payment, MIP, tax, insurance and HOA dues
  $$2,048.28 + $111.22 + $266.67 + $175.00 + $0.00$ $= $2,601.16$
9. Total monthly payment (year 1): $2,796.44
1. Find the base loan: the home price minus your down payment
  $$380,000.00 - $380,000.00 \times 10%$ $= $342,000.00$
2. Find the loan-to-value (LTV): how much of the price you borrow. It sets your insurance rate
  $\frac{$342,000.00}{$380,000.00}$ $= 90%$
3. Work out the upfront mortgage insurance (MIP), which is 1.75% of the base loan
  $$342,000.00 \times 1.75%$ $= $5,985.00$
4. Add the upfront MIP to the loan, since you chose to borrow it
  $$342,000.00 + $5,985.00$ $= $347,985.00$
5. Find the monthly loan payment (principal and interest). A standard formula gives the one amount that pays off the loan, with interest, in 240 months
  $\frac{$347,985.00 \times 0.00391667}{1 - {(1 + 0.00391667)}^{−240}}$ $= $2,239.27$
6. Look up the yearly MIP rate in HUD's table. A 20-year loan at 90% LTV, with a base loan at or under $726,200.00, pays this rate for 11 years
  $annual MIP rate$ $= 0.5%$
7. Find the monthly MIP for the first year: the rate times your average balance that year, split over 12 months
  $\frac{$337,200.70 \times 0.5%}{12}$ $= $140.50$
8. Add it all up: the loan payment, MIP, tax, insurance and HOA dues
  $$2,239.27 + $140.50 + $291.67 + $125.00 + $0.00$ $= $2,796.44$
10. Total monthly payment (year 1): $2,441.14
1. Find the base loan: the home price minus your down payment
  $$260,000.00 - $260,000.00 \times 10%$ $= $234,000.00$
2. Find the loan-to-value (LTV): how much of the price you borrow. It sets your insurance rate
  $\frac{$234,000.00}{$260,000.00}$ $= 90%$
3. Work out the upfront mortgage insurance (MIP), which is 1.75% of the base loan
  $$234,000.00 \times 1.75%$ $= $4,095.00$
4. Add the upfront MIP to the loan, since you chose to borrow it
  $$234,000.00 + $4,095.00$ $= $238,095.00$
5. Find the monthly loan payment (principal and interest). A standard formula gives the one amount that pays off the loan, with interest, in 180 months
  $\frac{$238,095.00 \times 0.00475}{1 - {(1 + 0.00475)}^{−180}}$ $= $1,970.80$
6. Look up the yearly MIP rate in HUD's table. A 15-year loan at 90% LTV, with a base loan at or under $726,200.00, pays this rate for 11 years
  $annual MIP rate$ $= 0.15%$
7. Find the monthly MIP for the first year: the rate times your average balance that year, split over 12 months
  $\frac{$229,387.65 \times 0.15%}{12}$ $= $28.67$
8. Add it all up: the loan payment, MIP, tax, insurance and HOA dues
  $$1,970.80 + $28.67 + $316.67 + $125.00 + $0.00$ $= $2,441.14$