Have you ever financed a home with an FHA loan from the Federal Housing Administration? If so, you could be entitled to a refund of any unused mortgage insurance. All FHA loan borrowers are required to purchase mortgage insurance and pay a premium. Those who never use this insurance could qualify to get some of the money back!
To get an FHA home loan refund, you must meet certain requirements and file a claim. Check to see if you are missing out on $100s or more in FHA refunds! Continue reading to learn how.
The FHA home loan is one of the most popular mortgages in the United States. This financing option is secured by the federal government, which means mortgage lenders are protected from financial trouble if borrowers stop making payments.
If you finance using an FHA loan, you must adhere to certain rules and requirements, including the need to purchase mortgage insurance. This is another way the lender is protected financially; you pay an up-front mortgage insurance premium (UFMIP) to the lender and, if you default on your loan, the lender can keep it.
But what if you don’t default on your mortgage?
That’s where the FHA mortgage refund comes into play. You may qualify to receive a full refund of your UFMIP if you meet all the following criteria:
- Your mortgage must have originated after September 1, 1983.
- You must have paid an up-front mortgage insurance premium.
- You must not have defaulted on your loan.
In some cases, you may qualify for an FHA-insured loan refund even if you do not meet all the criteria above. Depending on a few factors, you could get a partial refund from the government.
To qualify for a partial FHA loan refund, one of the following scenarios must be true:
- Your mortgage originated on or after January 1, 2001, and you were paying off or refinancing your loan within five years of the loan origination.
- Your loan originated between January 1, 1994, and January 1, 2001, and you were paying off or refinancing your loan within seven years of the loan origination.
If your FHA home loan originated on or after December 8, 2004, you could qualify for another type of refund. The U.S. Department of Housing and Urban Development (HUD) issues partial mortgage insurance refunds to borrowers who refinance their home loans to another type of FHA loan within the first three years of origination.HUD does not issue cash refunds to those who qualify under these terms. However, it does provide partial UFMIP refunds in the form of mortgage insurance credits, which you can use to lower the amount you must pay for your new refinanced loan.
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