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FHA Mortgage Insurance Refund
Frequently Asked Questions

Mortgage Library: FHA Programs: FHA Mortgage Insurance Refund

Does HUD-FHA Owe You a Mortgage Insurance Refund?

If you had a Department of Housing and Urban Development (HUD)/Federal Housing Administration (FHA) insured mortgage, you may be eligible for a refund of part of your insurance premium or a share of any excess earnings from the FHA's Mutual Mortgage Insurance Fund.

Click here to check if HUD owes you a refund.

CONSUMER ALERT
Beware of people (known as "Tracers") offering to help you collect your refund for a fee. You do not need to hire someone to collect your money. You can obtain your refund directly from HUD for free.

How do I request a refund for insurance premiums?

Who may be eligible for a FHA Refund or Share?

Premium Refund:

You may be eligible for a refund of a portion of the insurance premium if you:

  • acquired your loan AFTER September 1, 1983
  • paid an upfront mortgage insurance premium at closing AND
  • did not default on your mortgage payments.

Review your settlement papers or check with your mortgage company to determine if you paid an upfront premium.

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
  • HUD processed your FHA insurance termination BEFORE November 5, 1990.

Exceptions:

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 upfront 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?

The FHA Commissioner determines how much of the upfront premium is refunded when loans are terminated. Refunds are based on the number of months the loan is insured. For loans with a closing date prior to January 1, 2001, no refund is due the homeowner after the end of the seventh year. For loans closed on or after January 1, 2001, no refund is due the homeowner after the fifth year.

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 suporting 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 termination information 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.

How to contact HUD:

  • Phone: (800) 697-6967, 8:30 a.m. to 8:30 p.m. Eastern Standard Time, Monday through Friday.
  • Mail: U.S. Department of Housing and Urban Development, P.O. Box 23699, Washington, DC 20026-3699.

Note: All inquiries should include your name, your FHA case number, the date that the mortgage was paid-in-full, the property address, and your daytime phone number.

IMPORTANT: 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.


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