The following must be established for submitting Single Family upfront mortgage insurance premium (MIP) payments via the U.S. Department of the Treasury's automated collection service.
Set Up a Cash Flow Account
A Title II cash flow account for Single Family Premium Upfront Premiums must be set up for use by the U.S. Department of the Treasury's automated collection service from which funds are withdrawn for upfront MIP payments. This is done through HUD's Lender Electronic Assessment Portal (LEAP), which is accessible from the FHA Connection (Lender Functions menu). Please note that this cash flow account setup differs from the one established for the Lender Recertification fees.
- The lender's FHA Connection Application Coordinator grants LEAP Cash Flow Account Setup authorization to an employee with an FHA Connection user ID. This authorization is located in the Authorization for Lender Electronic Assessment Portal Applications section of the FHA Connection ID Administration page used by the Application Coordinator.
Note: If an employee does not have an FHA Connection user ID, a registration form is completed to obtain one. Use the Registering a New User link on the FHA Connection's home page.
- The employee with Cash Flow Account Setup authorization accesses the LEAP Cash Flow Account Setup and enters the required information.
- A prenotification (prenote) test is conducted to verify the validity of the account information provided and the ability to perform an electronic ACH withdrawal from the account. The test uses a zero-dollar amount transaction. The first ACH payment can be made eight calendar days after the collection service acknowledges receipt of the prenote transaction, if no errors are reported. The eight-day prenote test period begins the next calendar day after the cash flow account is set up. For example, if a cash flow account is set up on Friday, the eight-day prenote test period begins on Saturday. The lender uses Cash Flow Account Setup in LEAP 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.
Prepare to Submit Payments
Upfront MIP payments can be submitted online using the FHA Connection or through CPU to CPU batch file transmissions. It is recommended that lenders with large portfolios use the CPU to CPU batch file transmission method.
- Submitting Upfront MIP payments using the FHA Connection: Lender's employees who are responsible for making payments and/or viewing payment records must have an FHA Connection user ID and be granted the appropriate authorizations by the lender's FHA Connection Application Coordinator. These authorizations are located in the Upfront Premiums section of the FHA Connection ID Administration page used by the Application Coordinator. See the following FHA Connection Guide modules for further information: User Administration [PDF], Upfront Premium Payments [PDF], and Upfront Premium Case Information [PDF].
- Submitting Upfront MIP payments through CPU to CPU batch file transmissions: See Upfront Mortgage Insurance Premium Batch Payment Processing Instructions for CPU to CPU Transmissions for instructions. Although payments are not processed on the FHA Connection using this method, the FHA Connection's Payment History function can be used to view accepted and rejected batch files and Case Corrections can be used to correct non-monetary information submitted with a payment. Both are located on the Upfront Premium Collection menu. Authorization for these functions can be granted to a qualified employee with an FHA Connection user ID by the lender's FHA Connection Application Coordinator.
Seven-day Waiting Period for Insurance Endorsement
HUD's Single Family Premium Collection Subsystem - Upfront collects and processes upfront MIP payment information. A case (loan) cannot be endorsed for FHA insurance until seven business days or more have elapsed since the upfront MIP payment was received by SFPCS Upfront and reported to the Computerized Homes Underwriting Mortgage System (CHUMS), HUD's system for processing mortgage insurance applications. The seven-day waiting period begins when CHUMS receives the upfront MIP payment information.
The next business day, after the upfront MIP payment is submitted, you can view CHUMS information on the FHA Connection as follows:
- Use Case Query on the Case Processing menu to determine when CHUMS received the payment information for a specified case. For further information on Case Query, see the Case Processing Support Functions module of the FHA Connection Guide [PDF].
- Use Origination Reports Request and Origination Reports Retrieval on the Origination Reports menu to get the MIP Premium on Non-endorsed Cases Mortgagee Report. This report provides a list of non-endorsed cases for which the upfront MIP was paid and the date CHUMS received the payment information. However, Home Equity Conversion Mortgage (HECM) cases may be included in the report. For further information, see the Origination Reports module of the FHA Connection Guide [PDF].
Please contact SF Administration (firstname.lastname@example.org) with any questions or comments you may have regarding the FHA Connection.