How do I know if I am eligible for HUD mortgage insurance?


When you have been paying mortgage insurance premiums and your payments have satisfied the minimum premium needed based on the rules and regulations of the HUD, you may be eligible for a refund on your premiums.

HUD loans are insured through the Federal Housing Administration (FHA) and one of the requirements upon closing of the loan would be that you pay upfront mortgage premiums, in addition to the monthly insurance premiums. The upfront premiums can reach 1.75% of the total loan, with up to one half percent of the balance of the loan charged for monthly premiums.

Eligibility will depend on some conditions, such as:

  • How long premiums have been paid.
  • When the loan was originated: Loans originated after September 1, 1983 are not eligible for refunds.
  • When the mortgage insurance coverage was terminated.
  • When the loan was refinanced.
  • If the homeowner already has the requisite 20% in equity.
  • If the homeowner has been paying the mortgage amortization for a minimum number of years without delay or default.

Other things to note would be:

  • FHA loans that have paid off prior existing loans may be eligible for refunds.
  • A homeowner who allows the assumption of their loan by a new buyer will not be eligible for the refund.
  • Homeowners who refinance their FHA loan by taking out a new one will also not be given a refund. Instead, they may be provided with credit when excess mortgage insurance premiums have been paid at the time of closing.
  • If you are eligible for refunds, be sure to claim it within six years after the cancelation of the loan. Otherwise, you will no longer be eligible for the refund.
  • Those who are eligible for refund may look up their status at the HUD website.
  • The HUD usually will ask the Treasury Department to cut you a check for your refund.
  • If you know you are eligible for a refund and still haven't received a check, you should call the HUD office to follow up on your refund.
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