Basic Types of Refinance Cases
There are two basic types of refinance cases: FHA to FHA and conventional refinance.
- FHA-to-FHA Refinance: The prior loan was FHA-insured and the new loan is being FHA-insured. This type of loan is processed as a refinance case for upfront mortgage insurance premium (MIP) payments.
Note: If there is an issue with the prior FHA-insured loan, send an email message to LenderAssistance@hud.gov (email address for the Lender Assistance Section of HUD's Single Family Insurance Operations Division).
- Conventional Refinance: The prior loan was not FHA-insured and the new loan is being FHA-insured. This type of loan is processed the same as purchase cases for upfront MIP payments.
- If you are using the FHA Connection to submit a payment, select the Pay Premium for Conventional Refinance option on the Pay Upfront Premium page.
- If you are submitting a payment through CPU to CPU batch file transmission, use the batch file format for new purchase and conventional refinance cases.
Refinance Credit for FHA-to-FHA Refinance Cases
Refinance credit is upfront MIP that was paid but not earned by HUD. Any refinance credit from the prior case is applied to the new case when an upfront MIP payment is remitted for the new case. Please note the following:
- Refinance credit is calculated based on the closing or disbursement date provided.
- For the new case, a $0 payment can be sent to (a) get any credit left on the prior case applied to the new case (refinance credit) and (b) flag the prior case for insurance termination when the new case is endorsed for FHA insurance.
- On the FHA Connection, Refinance Credit Query on the Case Processing menu provides the refinance credit available for an active FHA-insured case that is being refinanced (this is the prior case). Case Master Summary on the Upfront Premium Collection menu and Refinance Authorization on the Case Processing menu provide the Refinance Authorization Number and refinance credit amount applied to the new case. The Refinance Authorization Number indicates approval to refinance the prior FHA-insured loan as a new FHA-insured loan.