An FHA borrower is purchasing a home for $280,000 with 3.5% down. The upfront MIP is 1.75%. What is the total loan amount including the financed UFMIP?

Correct answer: $274,929

Down payment = $280,000 x 3.5% = $9,800. Base loan = $280,000 - $9,800 = $270,200. UFMIP = $270,200 x 1.75% = $4,728.50. Total loan with financed UFMIP = $270,200 + $4,728.50 = $274,928.50, rounded up to $274,929. Note: UFMIP is calculated on the base loan amount, not purchase price.