FHA Mortgage Insurance Premium (MIP) Refund Guide

FHA loans are incredibly popular with home buyers because they provide you with a low interest rate, low down payment requirement financing option. However, if you choose to apply for a loan with more than 80 percent loan-to-value, you will be responsible for paying a mortgage insurance premium, or MIP, payment. When the loan is paid off early, such as through your own rapid repayment or through the sale of the property, you may qualify for a refund on your mortgage insurance premium payments through the FHA loan program. With a closer review, you can determine if you may qualify for a refund and how to claim the money that may rightfully belong to you.

Who Qualifies for a MIP Refund?

There are two primary instances when most homeowners may qualify for a refund on their MIP payments. First, if your loan was originated after September 1, 1983, you may qualify for a refund if you paid MIP payments and did not default on the loan. Second, if your loan was originated before this date, you may qualify for a distributive share of overpayment. To qualify for this, you should have made regular monthly loan payments for more than seven years, and your FHA MIP should have ended before November 5, 1990. As you can see, many of the people who qualify for a refund may not be aware of it because these qualifications relate to older loans on homes that individuals may no longer own or think much about.

Are There Exceptions to These Rules?

As you might imagine, there are a few exceptions to these qualifications that you should be aware of before you spend time searching for a possible refund in your name. For example, if you were supposed to receive a distributive share, you should have claimed the refund within a six-year period. Shares not claimed within this time frame can no longer be claimed. In addition, your mortgage broker may have claimed the refund to pay for insurance benefits, and this means that your refund may have already been applied to your account in various ways. Furthermore, if you sold your home to a new buyer who assumed your FHA loan, the MIP refund applicability transferred to the new owner. You are not eligible for a refund in these cases.

How Can You Determine If a Refund Is Owed to You?

It makes sense to learn more about the possibility of getting an MIP refund if you had a previous FHA loan. The HUD office makes this easy to do. You simply have to enter a few details into a search page on the HUD website. You simply input your last name, your FHA loan case number and the city and state where the subject property was located. Within a matter of seconds, the website will generate information regarding the availability of a refund in your name.

How Can a Refund Be Processed?

If you have been fortunate enough to learn that the HUD owes you an MIP refund on a previous FHA loan, you may be thrilled to discover your windfall. However, you may not yet know how much money is owed to you. You will need to contact the HUD office directly to begin the processing of your refund request. In some cases, your mortgage broker will initiate the refund request for you. You should follow up with the HUD office if the mortgage company has not received a response within 45 to 60 days. In addition, you can request the refund on your own by contacting the HUD office via phone or mail. When making an inquiry, provide the property address, the case number and the full names of anyone on the loan.

Some people learn through their search efforts that they are entitled to hundreds of dollars or more through an FHA MIP refund. If you qualify for money through this type of refund, you may be eager to get your hands on it. Requesting a refund is easy to do, and your mortgage company may be able to walk you through the process. Now is a great time to use the HUD portal to search for a possible refund in your name.