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FHA Single Family Insurance Claims Accounts Receivable Subsystem (ARS) Remittances

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HUD'S Single Family Insurance Claims Accounts Receivable Subsystem (ARS) remittance process complies with the U.S. Department of the Treasury's mandate to discontinue the use of outside lockbox services and switch to Treasury's Pay.gov collection service.

As of April 29, 2011, the Claim remittance functions on the FHA Connection (FHAC), which utilize the Pay.gov services for transferring funds, replaced the Single Family Claims lockbox, formerly located in St. Louis, MO. Lenders must transmit their payments utilizing the Claim Remittance functions on the FHAC instead of mailing checks to remit funds related to Single Family Claims repayments. This function allows the electronic submission of funds to satisfy accounts receivable.

Instructions for Submitting Accounts Receivable Subsystem Remittances

In order to use the Cash Flow Setup and/or submit Accounts Receivable Subsystem Remittances using the FHA Connection, you must be a registered FHA Connection user with authorization for these functions. If you don't have access to the FHA Connection or these functions, you should contact your company's FHA Connection Application Coordinator.

You may contact the FHA Help Desk at SFADMIN@hud.gov. You will need your company's ten digit lender ID number.

Follow these links for information regarding access to the FHA Connection:

1. Cash Flow Account Setup

Cash Flow Account Setup can be accessed using the following steps from the Main Menu of the FHA Connection: Lender Functions > Cash Flow Account Setup

Detailed instructions on how to perform a Cash Flow Setup can be found by going to the Cash Flow Setup link within the Lender Functions Module of the FHA Connection Guide.

Lenders have two options for entering their banking information depending on the frequency with which they intend to submit remittances.

a. Lenders making recurring remittances are encouraged to go through the Cash Flow Account Setup, designating which bank account will be used to withdraw funds. The Cash Flow Account Setup module within the FHA Connection Lender Functions section of the FHA Connection Guide has further instructions on how to proceed with this option. If this route is chosen, the "Cash Flowed" account will become the default account used when submitting remittances. An unlimited number of remittances can be submitted with a maximum of 25 cases per remittance.

If this option is selected, it must be performed prior to steps two and three below for accessing the remittance options and submitting funds. Otherwise, it will not be a viable option at the time of choosing a remittance bank account. Verification of the banking information provided, as discussed below in the "Pre-notification (Prenote) Process" section, takes seven business days. Thus, the banking information will be available for use on the eighth business day after the cash flow setup has been initiated.


b. Lenders can opt not to set up a Cash Flow Account and supply their banking information for each transmission. When using this method, lenders can submit a maximum of five cases that must settle prior to submitting another remittance.

2. Sign on to the FHAC and follow these steps to access the Claim Remittance function:

Single Family Insurance Claims Processing > Single Family FHA > Single Family Servicing > Claim Remittance

3. Claim Remittance Processing and History

Single Family Insurance Claims Processing >Single Family FHA > Single Family Servicing > Claim Remittance

a. The three Claim Remittance options are:

  1. Remit Single Family Claims
  2. Remit HECM Claim
  3. Claim Remittance History

Additional Background Information Regarding HUD's FHA Connection-Based FHA Single Family Insurance Claims Accounts Receivable Subsystem (ARS) Remittance Feature

Remittances submitted using the FHA Connection Single Family Insurance Claims ARS Remittance feature result from various events such as lenders' self-audits that identify over-claimed amounts; or re-conveyance demands issued by Single Family HOC/M&M contractors, among others. Collections posted to the ARS may also be lender remittances for findings resulting from a Post Claim Review.

If a remittance is not received from a lender within 90 days of establishing a receivable, the receivable will be offset against subsequent approved FHA single family claim disbursements for the lender until the receivable is satisfied. If a receivable is not satisfied within 120 - 150 days, it is referred to the Generic Debt Collection Center in Albany, NY, for enforced collection actions and the lender may be referred to the Mortgagee Review Board.

It is essential to correctly select the reason code from the drop down list for each remittance. Failure to properly identify FHA case numbers and reason codes for each individual remittance may lead to future claim offsets.

Furthermore, although contact information is collected during the Cash Flow Account Setup it is also collected from the transmitter on a transmission-by-transmission basis for correspondence regarding the specific transmittal.

Cash Flow Account Setup

The Cash Flow Account Setup process for designating banking account information for recurring remittances must be completed prior to submitting any remittances. The pre-notification process for account verification takes seven days, thus the lender's banking information will be available for use the eighth day after the cash flow setup has been initiated. Lenders with existing bank account information on file, i.e. due to a previously implemented Cash Flow Setup for use in paying Upfront and Monthly Premiums, can elect to use the same banking information in creating the Single Family Insurance Claims Accounts Receivable Subsystem (ARS) Remittance Cash Flow Setup and avoid the pre-notification process. Use of this feature will eliminate the approval period during which testing of the account and routing information with Treasury occurs. Alternatively, lenders can opt not to set up a Cash Flow Account and supply their banking information for each transmission. See page seven of the instructions regarding Single Family Insurance Claims Accounts Receivable Remittances found at https://entp.hud.gov/pdf/mp_sfs10_clm_remit.pdf.

Further instruction regarding Cash Flow Account Setup can be found at https://entp.hud.gov/pdf/mp_paygov.pdf. Cash Flow Account Setup can be accessed through HUD's FHA Connection website, located within the Lender Functions menu (which is accessed via the FHA Connection's main menu). An employee of a lender without access to FHA Connection or its applications, such as Cash Flow Account Setup, must complete a registration form to obtain an FHA Connection user ID. Once a lender's employee has an FHA Connection user ID, the employee is granted authorization to use Cash Flow Account Setup by the lender's FHA Connection Application Coordinator. This authorization is located in the Lender Approval section of the FHA Connection ID Administration page used by the Application Coordinator. The FHA Connection Registration Procedures module of the FHA Connection Guide has further instructions on attaining access.

Pre-notification (Prenote) Process

Once the cash flow account information is entered, HUD will initiate a prenote test to validate the account information provided and verify the ability to perform an electronic Automated Clearing House (ACH) withdrawal from the specified account. The first electronic funds transfer (EFT) remittance can be made eighth business days after initiation of the prenote, assuming no errors are reported. The prenote test period begins the next business day after the cash flow account is set up. A lender can use the Cash Flow Account Setup on HUD's FHA Connection website to determine the status of the prenote test and the date the account becomes active if no errors are reported. If there is an error, Cash Flow Account Setup provides the details. The Lender must address any checking account issues with its bank. HUD only accepts remittances from business checking accounts. On the FHA Connection, the Cash Flow Account Setup module of the FHA Connection Guide and the online help for Cash Flow Account Setup provide additional details.


Remittance Processing Time

All remittances that are fully received between 7:00 a.m. and 8:00 p.m. EST on a business day are included in the processing for that business day and will be posted the following day. Any remittance received after 8:00 p.m. or on a non-business day (Saturday, Sunday, or federal holiday), will be accepted and held for processing until the next business day. Furthermore, transactions entered through the FHA Connection after 8:00 pm of the third to last business day of the month through the end of the month, will not be posted to the Accounts Receivable Subsystem until the first business day of the following month (e.g., for the month ending 9/30/10, any transaction submitted after 8 pm on 9/27/10 and before 8:00pm on 9/30/10 will be posted to ARS 10/1/10). Lenders are encouraged to process remittances early to avoid penalties as a result of transmission problems.

No Check Re-Presentments

ACH items will not be re-presented for collection due to insufficient funds. If HUD fails to collect remittances the first time, the remittance shows a "Failed" status. Lenders are advised to check their remittance history screen for remittances that require correction and resubmission. A notification will not be automatically generated.


Bank account information provided during the one-time cash flow account setup is encrypted using the Triple DES encryption standard and stored in a database with access limited to authorized support personnel. All bank account data is stored in HUD's databases only. The remittance information is transmitted securely to the U.S. Department of the Treasury's Pay.gov system for collection processing. Data security is controlled by HUD's strict Automated Data Processing (ADP) security policies. All HUD technical support personnel are required to undergo background investigation. FHA Connection security policies are followed for user access to the Cash Flow Account Setup function and the online FHA Connection Single Family Insurance Claims Accounts Receivable Subsystem (ARS) remittance process. FHA Connection Application Coordinators are required to provide other users within their lending institutions access to these functions, if appropriate.

Questions and Comments

Please email HUD with any questions or comments you may have about the Single Family Insurance Claims Accounts Receivable Subsystem (ARS) Remittance process.

Frequently Asked Questions

1. Are supporting documents required to be submitted?

a. No, but you will be required to choose the correct reason code from the drop-down menu. Retain supporting documentation in the claim file.

2. Is there a Mortgagee Letter available for this feature?

a. Yes. Mortgagee Letter 2011-08.

3. Is this feature accessible through the Pay.gov website?

a. No, you must access the Claim Remittance functions via the FHA Connection. The Claim remittances features are not accessible on the Pay.gov website.

4. How do I access the FHA Single Family Insurance Claims Accounts Receivable Subsystem (ARS) Remittances features?

a. The FHA Single Family Insurance Claims Accounts Receivable Subsystem (ARS) Remittances features must be accessed through the FHA Connection. Your on-site FHA Connection Coordinator can provide access not only to the FHA Connection, but specifically to the Remittance features as well.

5. Will HUD withdraw funds from the account we provide through the Cash Flow Setup?

a. HUD will withdraw only those funds designated by the lender during a Single Family Claims ARS Remittance submission.

6. How long is the Remittance History maintained? How can we get a copy of our Remittance History?

a. The Remittance History is available indefinitely and case details are downloadable.

7. How many remittances can be submitted per day?

a. If a "Cash Flowed" account is used, there is no limit to the overall number of remittances, but each remittance accepts a maximum of 25 cases. If a "Cash Flowed" Account is not used, and banking information is entered for each transmission, only one remittance of five unsettled cases can be submitted at a time.

8. Can lenders opt not to set up a Cash Flow Account?

a. Yes. Lenders have the option to enter their banking information on a remittance-by-remittance basis.

9. Who can I contact to discuss the use of appropriate reason codes, and where funds need to be sent?

a. Fha_sfclaims@hud.gov and sfschedremittances@hud.gov.

10. What should I do if I cannot access the remittance links?

a. Speak to your company's FHA Connection Coordinator, who will be able to provide access.

11. Is there a minimum amount required to make a remittance?

a. No.

12. Is the submission of remittances limited to items we are actually billed for?

a. No. You may remit over-claimed amounts at any time. Receipt of a billing letter is not a pre-requisite for remittances. In all cases, however, select the appropriate reason code.
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