FHA HUD REFUND PROGRAM FOR MORTGAGE INSURANCE PREMIUM

2007-05-02 10:04:19

( Financial )



HUD and FHA

The Federal Housing Administration commonly known as FHA is an agency within the Department of Housing Urban Development commonly known as HUD. The FHA is in charge of issuing loan guarantees for housing loans applied by citizens of United States of America seeking the assistance of HUD to avail mortgage from lenders.

FHA Mortgage Insurance

FHA implements a mortgage insurance paid by borrowers that protects lenders from repayment defaults from mortgage borrowers. Thus, lenders have lower risks with FHA mortgage insurance since the agency will cover the amount of default repayments of homeowners. However, loans must meet requirements set by FHA to benefit from its mortgage insurance.

FHA HUD REFUND PROGRAM

The agency has a program known as FHA HUD refund program where qualified borrowers can avail of refunds for mortgage insurance premiums they paid in relation to their housing loans. Borrowers can avail of the benefits of FHA HUD refund program if they have paid the insurance premium required during closing of their HUD mortgage with lenders and if they have not defaulted in their mortgage payments.

Determination of Refunds

FHA determines the amount of refunds distributed to housing owners based on the amount of mortgage insurance paid by borrowers at the time of termination of maturity of their loans. The number of months borrowers insured their HUD loans specifically determines the amount of refunds given to homeowners.

Processing of Refunds

Lenders notify FHA and borrowers of the termination of their FHA mortgage insurance. Borrowers have to fill up application forms for refund of mortgage insurance premium subject for approval of HFA commissioners. HFA then notifies the Department of Treasury to send a check to qualified borrowers.

Borrowers need to follow up with the staff of the FHA if they don’t receive their checks after forty-five days of full payment of their loans. Also, they need to check with their mortgage companies if they have terminated their FHA mortgage insurance premium when their loans mature.


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