Is there such a thing as a refund for FHA Up-Front Mortgage Insurance or FHA UFMIP? This mortgage insurance premium is required on FHA loan transactions and must be paid either in cash at closing time or must be financed into the loan amount. FHA loan rules do not allow a borrower to pay a portion and finance a portion of the FHA UFMIP, it must be paid in full using financing or cash. Borrowers have many questions about this FHA mortgage insurance requirement, including whether or not a refund is possible under the right circumstances. FHA forward mortgages require UFMIP as a condition of the loan no matter if the transaction is an FHA One-Time Close construction loan, existing construction purchase, or whether the borrower is buying a manufactured home or mobile home. The rules for UFMIP including the refund issue are found in the FHA loan handbook, HUD 4000.1, which instructs the lender that refunds ARE possible if the borrower is refinancing an FHA mortgage to another FHA mortgage within a specific time frame. “If the Borrower is refinancing their current FHA-insured Mortgage to another FHA- insured Mortgage within 3 years, a refund credit is applied to reduce […]
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