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FHA Mortgage Insurance Premium Refund Eligibility

Updated: June 1, 2020  |  Posted by:  |  Related: Unclaimed HUD Refunds

Are you one of the home owners who opt to sell their homes? If your answer is yes, then you must be eligible to get your refund for Federal Housing Administration mortgage insurance. As stated on the Homeowners Protection Act of 1998, it says that “if the borrower has paid for private mortgage insurance in advance at closing or is currently paying on an annual basis, upon cancellation they are entitled to a refund of the unearned premium, which must be transferred by the lender within 45 days of cancellation notice”.

If you are qualified for the refund, you may get an amount between $800 up to $1500. These refunds are issued by the Housing and Urban Development (HUD) who administers housing assistance and projects of the federal government and likely exempted for any state reporting purposes.

Who are qualified to the Refund?

Most important note that you need to remember when you apply to the FHA mortgage insurance refund is that you had the HUD or Federal Housing insured mortgaged. This refund is part of your Home insurance premium. Hence, it can be also a share of any incomes from the Mutual Insurance Fund.

Premium Refund

In the case of the premium refund, this happen when you get a FHA loan and pay the cost of a mortgage insurance premium at the time of closing.

Upon this initial premium you pay it is called an “upfront mortgage insurance” or MIP. There are important eligibility for to get a premium refund:

You had acquired your FHA loan after September 1, 1983
Pay the Upfront mortgage insurance premium at the time of closing
When you pay your FHA home mortgage on time

According to the HUD facts on FHA loans and insurance refund, it is necessary for FHA mortgage insurance plans that homeowners must have an upfront insurance or MIP. Since, it is a requirement for any FHA loans and lenders to submit their MIP payments on FHA loans within the period of 10 days after the disbursement date or closing date. If you pay all your FHA loans, then you have the chance to get a refund of a portion of the upfront FHA LOAN mortgage insurance premium.

Distributive Share

Still, the FHA Loan may refund the decades back loan. So if you had a loan a long time ago, then you might still be qualified for the refund. On the policy of Distributive share, you can acquire you refund if:

If you had closed all you loan before the date of September 1, 1983
Pay all you mortgage payments for more than seven years
When you FHA insurance was terminated before November 5, 1990.

However, there are still exemptions for the refund:

When the FHA loan was assumed and the seller is not entitled to any refund.
FHA loan was refinanced in an FHA refinancing program When there is claim filed in the HUD for insurance benefits by the mortgaged company. On the case of Statute limitations, HUD/FHA is not accountable for any refund on the distributive share that remains unclaimed within the period of six years after the date of the notification that was sent to the reported address of the mortgagor.

Important Facts on how the refunds are determined

On the FHA rules on home loan, it is clearly stated that there is no refund owed after the end of the seventh year when your FHA loan closed before January 1, 2001 and was endorsed before December 8, 2004. While for those who have FHA insured loans with closing dates on or after January 1, 2001 and endorsed before December 8, 2004, the FHA borrowers still did not owned for any refunds after the fifth year of insurance. Furthermore, FHA insured loans endorsed on or after December 8, 2004, the home owner could not avail for refund unless they will refinance to a new FHA –insured loan, and lastly, there is no owned refund for these homeowners after the third year of the insurance.

How to process for FHA mortgage insurance refund?

If you are qualified for the FHA Mortgage Insurance Refund, you must get an application form within the period of 45 days after you paid the FHA loan.

The Mortgage Company must notify the HUD of the termination of the FHA mortgage for your loan. Take note that if you receive a HUD-27050-B form, you must read it carefully and comply all the necessary information and should be notarized. Along with form, you must have a copy or a proof that you were the legitimate owner of the house or any property during the time that the insurance was terminated.

After the HUD receive the completed form of HUD-27050-B including all the supporting evidence and pertinent documents. All of this information will undergo strict review. When the HUD complete all the reviews, this will be the time that the agency will request the Treasury department to issue a check directly to you or the other way around, HUD may request additional information.


After 45 days of you application and you already paid your entire loan and still did not receive any refund. You must check your mortgage Company and to confirm if they submit a request for the termination of the mortgage insurance on your loan to the HUD. If they confirm with your request, you need to contact the HUD for follow-up. Always remember that if you still not receive your refund within the period of 120 days after the date that you submit your application, there is an urgency that must contact your HUD.

During your follow-ups and inquires must include always your name, date of the mortgage was paid-in-full, property address, daytime phone number and most important is the FHA case Number. You can contact HUD through their phone number:(800) 697-6967, 9:00 a.m. to 6:00 p.m. Eastern Standard Time, Monday through Friday. While you can email your application at .S. Department of Housing and Urban Development, P.O. Box 44372, Washington, DC 20026-4372. You can visit the on the details regarding the FHA mortgage insurance refund.


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