Nope, the buyer has FHA loan, maybe getting that loan

requires this insurance, I never heard of it.

I currently received two offers, the FHA one is like 4k more than the other, but contains a lot of this type of unfamiliar terms for me to digest :(

Thanks 万枫 for your help. One more question, do you think FHA fix could cost me 4k, if less than 2k, I would go for FHA offer, otherwise, I'd like to go for the other offer which is pre-approved. I'm a little hesitated right now...