Certain FHA customers are owed an FHA MIP refund. Could you be one of them? It’s possible. If you took out an FHA loan between September 1, 1983 and December 4, 2004, keep reading. You may be able to get some of the money back that you paid if you paid your loan off any time after origination. This could mean via a refinance or even selling the home.
The FHA owes the refund to those that originated the loan and never received a portion of the insurance money they paid. The insurance protects the loan while it is in use. Once you pay off the loan, though, the insurance isn’t necessary any longer and you are due a refund.
Who is Eligible for the Refund?
Aside from taking out an FHA loan between the eligible dates and paying off the loan, there are other requirements you must meet:
- You paid the upfront mortgage insurance owed at the closing and did not wrap it into your loan
- You have made all of your FHA loan payments on time
Who is Not Eligible for the Refund?
Of course, there are exceptions to the rule. The following issues could make you ineligible for a refund:
- If you let someone else assume your mortgage, you would not be eligible for a refund as the new homeowner then made the insurance affective
- If you refinanced your FHA loan using the FHA streamline program you likely already received a prorated refund of your MIP
- If you defaulted on your mortgage at some point, the insurance had to pay out and you are ineligible for a refund
Find Out if You are Owed a Refund
So you know you fit into the above situations, how do you get your refund? Start by visiting the HUD website. You’ll need your name, FHA case #, city, and state. You can find your FHA case number on your HUD-1 Settlement Statement. You can also ask your lender for the case number if you cannot locate the Settlement Statement.
If your name appears on the list when you search for it, call 1-800-697-6967. HUD also encourages you to call this number if you think you are owed a refund but your name does not show on the list.
How do You Get Your Refund?
Now, the bigger question – how do you get your refund? Here’s the process:
- Your lender should let HUD know that your FHA loan is terminated. This should start the refund process.
- HUD generally notifies the U.S. Department of the Treasury and they issue you a check.
- If the Treasury Department does not send a check, they may issue an Application for Premium Refund for you to complete.
- Once you complete the application and send it back, HUD will review the information and determine your eligibility for a refund.
You should receive a refund within 45 days of requesting it. If you don’t, you can follow up with your lender to make sure they notified HUD of the insurance termination. You can also follow up with HUD directly.
Watch for Notices
HUD has not notified every one of their eligibility for an FHA refund. However, if they did, the statute of limitations applies. If six years have passed since they sent you the notification, you can no longer make a claim. However, if a notice was never sent, the statute does not apply to you.
If you ever had an FHA loan, it pays to check if you are owed a refund. It only takes a few seconds to check the database. Some people are owed thousands of dollars and are unaware of it! Check your status and then start the process right away if you are owed money.