Premium Refund: You may be eligible for a refund of a portion of the insurance premium if you:
- acquired your FHA loan after September 1, 1983
- paid an up-front mortgage insurance premium at closing on your FHA loan and did not default on your mortgage payments AND are within a 36 month period from the time of acquisition.
Review your settlement papers or check with your mortgage company to determine if you paid an up-front
mortgage insurance premium (UFMIP). Note that all FHA loans require an UFMIP.
Distributive Share: You may be eligible for a share of any excess earnings from the Mutual Mortgage Insurance Fund if you:
- originated your loan before September 1, 1983
- paid on your loan for more than seven years and had your FHA insurance terminated before November 5, 1990.
Assumptions: When an FHA-insured loan is assumed, the insurance remains in force (the seller receives no refund). The owner(s) of the property at the time the insurance is terminated is entitled to any refund.
FHA to FHA Refinances: When an FHA loan is refinanced, the refund from the old premium may be applied toward the up-front premium required for the new loan.
Claims: When a mortgage company submits a claim to HUD for insurance benefits, no refund is due the homeowner.
Statute of Limitations: HUD is not liable for a distributive share that remains unclaimed 6 years from the date notification was first sent to the last known address of the mortgagor.
How are refunds determined?
For any FHA-insured loans with a closing date prior to January 1, 2001, and endorsed before December 8, 2004, no refund is due the homeowner after the end of the seventh year of insurance. For any FHA-insured loans closed on or after January 1, 2001 and endorsed before December 8, 2004, no refund is due the homeowner after the fifth year of insurance. For FHA-insured loans endorsed on or after December 8, 2004, no refund is due the homeowner unless they refinanced to a new FHA-insured loan, and no refund is due these homeowners after the third year of insurance.
How are refunds processed?
- Your mortgage company notifies HUD of the termination of the FHA mortgage insurance for your loan.
- If you are eligible for a refund, HUD will either request that the Department of the Treasury (Treasury) issue a check directly to you or send you an Application for Premium Refund or Distributive Share Payment (form HUD-27050-B) so that you can provide HUD with additional information about your case.
- If you receive a form HUD-27050-B, please read and complete the application carefully, sign it, have it notarized, and return it to HUD along with proof that you were the owner of the property at the time that the insurance was terminated.
- After HUD receives your completed form HUD-27050-B and the necessary supporting documentation, this information will be carefully reviewed. Upon completion of this review, HUD will either request that Treasury issue a check directly to you or request additional information from you.
How to follow-up:
If you do not receive a check or an application within 45 days after you have paid off your loan, check with your mortgage company to confirm that they have sent HUD a request to terminate the mortgage insurance on your loan. If they confirm that the correct terminationinformation was sent, contact HUD. If you do not receive a refund or any other documentation from HUD within 120 days after the date you mailed your application, contact HUD immediately.