Does the FHA Owe You Money?
December 6, 2010
When you start the FHA loan application process, you're expected to budget for a down payment, closing costs and fees associated with buying a home with an FHA mortgage. But some borrowers also learn they could be getting money back from the Department of Housing and Urban Development. For FHA borrowers, two situations apply that may result in an entitlement to an FHA payment.
One is the Premium Refund which pays a sum based on the borrower's up-front mortgage insurance premiums. The other is called Distributive Share, a dividend paid from proceeds of the FHA's participation in the Mutual Mortgage Insurance Fund.
The FHA Premium Refund is for those with FHA loans acquired on or after September 1, 1983 and who paid an up front mortgage insurance premium on the closing date of the loan. There's one exception; those who would otherwise qualify for the refund are not eligible if the FHA loan went into default status.
The FHA encourages borrowers to check the details of their loan settlement papers or call their lender if they aren't sure an up front mortgage insurance premium (UFMIP for short) was paid. The FHA also offers a handy database for homeowners to use. You can check to see if your FHA loan is eligible by using the electronic form, but you'll need to have your FHA case number handy to enter when doing the check. The FHA or your lender can tell you when you would become eligible to get this payment based on the details of your FHA loan, assuming you qualify.
The other payment from the FHA is known as the Distributive Share, paid to those with FHA loans that started BEFORE September 1, 1983. FHA borrowers who made mortgage payments for more than seven years on such loans and had their FHA insurance terminated before November 5, 1990 are eligible. Normally there is a process that's followed when such refunds are available and the FHA official site also states, "The rules governing eligibility for premium refunds and distributive share payments are based on the financial status of the FHA insurance fund and are subject to change."
Check with the FHA by email at [email protected] for further details if you're unsure of your eligibility or have questions about the program.
One is the Premium Refund which pays a sum based on the borrower's up-front mortgage insurance premiums. The other is called Distributive Share, a dividend paid from proceeds of the FHA's participation in the Mutual Mortgage Insurance Fund.
The FHA Premium Refund is for those with FHA loans acquired on or after September 1, 1983 and who paid an up front mortgage insurance premium on the closing date of the loan. There's one exception; those who would otherwise qualify for the refund are not eligible if the FHA loan went into default status.
The FHA encourages borrowers to check the details of their loan settlement papers or call their lender if they aren't sure an up front mortgage insurance premium (UFMIP for short) was paid. The FHA also offers a handy database for homeowners to use. You can check to see if your FHA loan is eligible by using the electronic form, but you'll need to have your FHA case number handy to enter when doing the check. The FHA or your lender can tell you when you would become eligible to get this payment based on the details of your FHA loan, assuming you qualify.
The other payment from the FHA is known as the Distributive Share, paid to those with FHA loans that started BEFORE September 1, 1983. FHA borrowers who made mortgage payments for more than seven years on such loans and had their FHA insurance terminated before November 5, 1990 are eligible. Normally there is a process that's followed when such refunds are available and the FHA official site also states, "The rules governing eligibility for premium refunds and distributive share payments are based on the financial status of the FHA insurance fund and are subject to change."
Check with the FHA by email at [email protected] for further details if you're unsure of your eligibility or have questions about the program.
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