Refunds

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Questions and Answers

What are valid reasons for a refund?

The established criteria for HUD to approve a refund are:

	Overpayment
	Penalty adjustment
	Payment remitted for wrong case
	Case is canceled (not endorsed)
	Payment made on sold or transferred case
	Payment made on non-Periodic case (for Periodic refunds only)
	Payment made on invalid case
	Payment made on terminated case
	Other reasons approved by HUD

How can I get a Periodic (monthly) premium refund?

Refunds can be obtained through the Disbursements and Customer Service Branch of HUD's Single Family Insurance Operations Division (SFIOD). For a refund of a Periodic premium payment, send an email request to LendersRefunds@hud.gov. You may group up to 10 cases with the same reason on one refund request. Your request should include: 

	Name and ID of mortgagee (enter ID in subject field)
	Periodic refund (specify in subject field)
	FHA case numbers (up to 10 cases per request)
	Refund amount for each case
	Reason for refund request (one reason per request)
	Date payment was remitted
	Mortgagee contact name including telephone number and fax number (optional)
	Attention and address to whom refund check is to be sent (will be sent to Premium Billing Address on record in HUD's Institution Master File (IMF) if not specified)

Upon request, you must submit documentation needed to support the refund.

We received several Periodic (monthly) premium refund checks for our cases. Why didn't we receive just one check?

When you request a refund, the maximum number of cases on each check is 10. The number of checks you receive will depend on how many cases were included in your email request and the number of separate requests you made.

Periodic (monthly) premium refund checks are being sent to the wrong address. How can this be corrected?

A refund check is sent to the mortgagee's Premium Billing Address on record in HUD's Institution Master File (IMF) unless an address is specified in the refund request emailed to HUD. The Premium Billing Address can be viewed and corrected on HUD's FHA Connection website. See the Lender Approval module of the FHA Connection Guide for further information.

What is the turnaround time for a refund? How soon can I expect my check?

It may take up to 60 days to complete the normal processing of your request after HUD receives it. For Periodic refunds, once your refund shows a CONF status, you should receive your check within 10 - 14 days. You can monitor the status of your Periodic refunds through the Refund Transactions report file on the FHA Connection or the Frame Relay Network.

If I paid Periodic (monthly) premium for a case in error, can the funds be transferred to a case in my portfolio instead of getting a refund?

Yes. In lieu of a refund, a reallocation request can be made to transfer the funds to a case in your portfolio.

Can I request a refund for Periodic (monthly) premium paid in error for a case I do not service or hold?

Yes. If you made a payment in error for a case that was not in your portfolio, you can request a refund. However, if FHA insurance on the loan was terminated (case has a status of T), the refund request must be made within 90 days of the error. Otherwise, a refund from HUD can only be requested if the refund amount for the case is not greater than the excess premium amount (i.e., unapplied amount) on the case. If the refund amount is greater than the case's excess premium amount, or there is not excess premium, you must request the difference (or the entire refund) from the current servicer or holder of the case.

FHA insurance was terminated on a case (loan) I service/hold. Can I request a refund for Periodic (monthly) premium paid for the case?

	There is excess premium on or after the insurance termination date.
	The refund amount requested is not greater than the excess premium amount.
	The refund is not for Periodic premium paid for the month the case was terminated. (Note: The current servicer/holder is responsible for paying the Periodic premium assessed for the month in which the insurance is terminated. For example, if a case is terminated on November 5, the November premium must be paid by December 10.)

What happens if a refund causes a shortage of Periodic (monthly) premium on a case that I service/hold?

If the shortage is not remedied in a timely manner, the missing amount and a late charge are included in the next monthly bill. Your Reconciliation report file will show an M02 discrepancy type for the case.

How can I get information on the status of a Periodic (monthly) premium refund request?

The Refund Transactions report file provides information about refunds for your FHA cases that were created or had a change in status during the current month. The Refund Transactions report file is available on HUD's FHA Connection website or the Frame Relay Network (for large volume lenders).  The Refund Transactions file is updated weekly, available every Monday. On the first day of the month, it is updated again and includes all the refund transactions for the previous month.

Do you have access to the FHA Connection? If not, please refer to Mortgagee Letter 97-33 (July 24, 1997) for information about gaining access. After signing on to the FHA Connection, select Single Family FHA, followed by Single Family Servicing, then Monthly Premiums. Select the Retrieve Files button to access your files. 

How long does the Refund Transactions report file remain available on the FHA Connection?

The Refund Transactions report file remains available for three months. Three months worth of the latest Refund Transactions report files, including the current month's, are available to view or download.

Can I retrieve a previous Refund Transactions report file from the FHA Connection?

Three months worth of the latest Refund Transactions report files are available on the FHA Connection.