What to Know About FHA Title Insurance
October 31, 2025
What is a property title?
A property title represents your bundle of rights to the property, including the right to own it and sell it.
Why does my FHA lender require a title search?
FHA lenders require a title search to protect their investment. The search verifies that the seller legally owns the property and that no one else has a hidden claim or debt against it.
What does a title search do?
A title search is an investigation of public records. A title company or attorney examines a property's history. They look at deeds, mortgages, tax records, and judgments to confirm the seller is the owner.
What kind of problems does a search look for?
The search looks for "encumbrances" or "clouds" on the title. These are issues that threaten your ownership. This includes outstanding mortgages, unpaid property taxes, or liens from contractors.
What happens if the search finds a problem?
If the search finds a defect, the lender will not approve the FHA loan until the seller resolves the issue. The seller may have to pay a tax bill or settle a lien before the sale can close.
Is a title search the same as title insurance?
No. The search is the investigation. Title insurance is a policy that protects against loss from title defects that the search might have missed. FHA lenders require you to buy a lender's title insurance policy to protect their loan.
Do I need my own title insurance policy?
The lender's policy does not protect you or your equity. You may purchase a separate owner's title insurance policy. This policy defends your ownership rights if a claim emerges after you buy the home.
Who pays for the title search and insurance?
The homebuyer pays for the title search and the insurance policies. These are fees paid at closing. Your lender will list these fees on your Loan Estimate.
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