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Refunds

Questions and Answers

What are valid reasons for a Single Family monthly (periodic) premium refund?

The established criteria for HUD to approve a refund are:

  • Overpayment
  • Penalty adjustment
  • Payment remitted for wrong case
  • Case is canceled (not endorsed for FHA insurance)
  • Payment made on sold or transferred case
  • Payment made on non-Periodic case (e.g., HECM or Title I housing loan)
  • Payment made for a Bill Type 3 case (mortgage insurance premium paid one time at mortgage initiation)
  • Other reasons approved by HUD

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

A refund of a monthly (periodic) premium payment can be requested through HUD's Single Family Insurance Operations Division (SFIOD). On the FHA Connection, go to the Monthly Premums menu and select Create Refund Request in the Periodic (Monthly) Premium section. The Create Refund Request page appears for entering refunds for up to 100 cases online or uploading a Microsoft® Excel® spreadsheet with up to 5,000 cases. If approved, the refund check is sent to the Premium address on record in HUD's Lender Electronic Assessment Portal (LEAP) for the institution. See the Monthly Premium Refunds [PDF] module of the FHA Connection Guide for further details.

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

Do you have access to the FHA Connection? If not, the FHA Connection Welcome page includes links to detailed information about the website. The FHA Connection Registration Procedures [PDF] module of the FHA Connection Guide provides information on FHA Connection registration. (See also Mortgagee Letters 98-13 [DOC] and 97-14 [TXT].)

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

Refund Status on the FHA Connection provides a way to get the details and current status of a refund request. On the FHA Connection, go to the Monthly Premums menu and select Refund Status in the Periodic (Monthly) Premium section. See the Monthly Premium Refunds [PDF] module of the FHA Connection Guide for further details.

Also, the Refund Transactions report file provides information about refunds that were created for your FHA cases or had a change in status during the current month. The Refund Transactions report file is available through the FHA Connection or, for high volume lenders and service bureaus, through the Alternate Report Retrieval process. The Refund Transactions report 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. See the Monthly Premium Reports [PDF] module of the FHA Connection Guide for further details.

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

The number of checks you receive will depend on how many cases were included in your refund request and the number of separate requests you made. If the refund request needs to be reviewed and approved by HUD and there are more than 10 cases in the request, the cases are grouped into separate refund requests with 10 cases per request. A check is issued for each refund request. If the refund request meets all requirements and is automatically approved, one refund is processed and one check is issued for all cases in the request for up to 5,000 cases.

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

A refund check is sent to the lender's Premium address on record in HUD's Lender Electronic Assessment Portal (LEAP). The Premium address can be viewed and corrected in LEAP, which is accessed from the FHA Connection's Lender Functions menu.

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 monthly (periodic) refunds, once your refund shows a Confirmed (CONF) status, you should receive your check within 10 - 14 days. You can monitor the status of your monthly refunds using Refund Status on the FHA Connection and the Refund Transactions report file, available on the FHA Connection or through the Alternate Report Retrieval process (secure file transfer process).

If I paid monthly (periodic) 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 monthly (periodic) 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 monthly (periodic) premium paid for the case?

A refund can be requested under these conditions:

  • 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 monthly (periodic) premium paid for the month the case was terminated. (Note: The current servicer/holder is responsible for paying the monthly 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 monthly (periodic) 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 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.