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HUD Has $412 Million in Uncollected FHA Mortgage Insurance Refunds


If you’ve ever taken out an FHA loan, you may be eligible for a refund on that costly upfront mortgage insurance premium.

Sure, the FHA is struggling at the moment and no longer so liberal about doling out refunds on newly originated loans, but they’ve still got over $400 million in their coffers from uncollected refunds from years past.

Are You Eligible for a Refund?

  • If you received an FHA loan after Sep. 1st, 1983
  • You might be due a cash refund
  • For any unused portion of the upfront mortgage insurance premium
  • Assuming you didn’t default on mortgage payments

The rules vary widely, but if you obtained your FHA loan after September 1st, 1983, paid an upfront mortgage insurance at closing, and did not default on mortgage payments, you should have received a refund for any unused portion of the premium that you paid upfront.

Additionally, you might even be eligible for a “distributive share” of excess earnings from the FHA’s Mutual Mortgage Insurance Fund if your loan was originated before September 1st, 1983, paid for more than seven years, and FHA insurance was terminated before November 5th, 1990.

However, many people move and/or don’t realize a refund is actually due, or throw away the notice, and that explains why millions of dollars remain unclaimed.

There are exceptions to the rules as well. For one, if the FHA loan is assumed the insurance stays in place and the seller receives no refund. The owner of the property would be entitled to any refund once the insurance is eventually terminated.

If a claim is submitted to HUD by the mortgage lender, the homeowner is also not eligible for a refund.

And HUD takes no responsibility for refunds related to the distributive share if they remain unclaimed six years from the date notification was originally sent to the last known address of the mortgage holder.

How to Get the FHA Premium Refund

  • You can do a search on the HUD website
  • By entering just your last name
  • Or an FHA case number
  • You can also call the Mortgage Insurance Premium Refund Support Service Center

Typically, the mortgage company should notify HUD when your mortgage insurance is terminated and paperwork soon follows.

But if you know you’ve had an FHA loan at some point in the past 30 or so years (and didn’t get any refund info), you can go to the HUD website and search their database by last name or FHA case number.

I did a search for the last name “Robertson” and the system spit out 365 results. Some of these people are literally owed thousands of dollars, whether they realize it or not.

Assuming your name is on HUD’s list, you can call 1-800-697-6967 to get your refund processed. You’re actually urged to call either way if you think a refund might be due, even if your name is absent from the list.

Also note that HUD has enlisted a company by the name of Immediate System Resources, Inc. to search for homeowners who are owed money.

They did so to improve outreach and to prevent third-party companies unaffiliated with HUD from profiting via “finders fees.”

If someone contacts you from a random company offering to help you collect your FHA refund, there’s no need to work with them.

They will simply take a portion of your refund for a disproportionate amount of work. Do it yourself and get the full amount of the refund.

Does the FHA Still Offer Refunds?

upfront refund

  • The rules on FHA refunds have changed
  • For home loans endorsed after Dec. 8th, 2004
  • No refund is due unless you refinance into another FHA loan
  • And do so within three years

The rules are a lot different today than they used to be. If your FHA loan was endorsed on or after December 8th, 2004, no refund is due unless you do a rate and term refinance into another FHA loan and do so within three years.

The amount of the refund is prorated and decreases during those 36 months (as seen in image above), and is applied toward the upfront mortgage insurance premium on the new FHA loan.

For FHA loans closed on or after January 1st, 2001 and endorsed before December 8th, 2004, borrowers are eligible for a partial refund if they refinanced or paid off their loan within five years from the date of closing.

For FHA loans with a closing date prior to January 1st, 2001 and endorsed before December 8th, 2004, partial refunds are available to those who paid off their FHA loans within seven years from the date of closing.

It’s all pretty convoluted, so it’s probably best to just search for your name on the HUD website to see if they owe you thousands of dollars.

15 thoughts on “HUD Has $412 Million in Uncollected FHA Mortgage Insurance Refunds”

  1. Colin, we have helped hundreds of homeowners that have tried to get their refund directly from HUD. Many complain about the lack of support provided by the Department of Housing, the complication locating the supporting paperwork, and the constant follow up required.

    Claimants do have the right to recover this money on their own but Tracer Services like ours do provide a valuable service to many that just don’t want to deal with the governments red tape.

  2. Its funny how these websites that owe Americans so much money , look down at locators and finders. Yet they do so little to help people find their money. Its no accident. Because if you don’t claim it they absorb it. Of course you can claim it by yourself. But first you have to know its there. And how to claim it because very often there is red tape and problems.

  3. I hired a finder once. She charged 10%, which I thought was totally fair, considering that I would have probably never had the time to navigate the process and get my refund.

  4. Colin,
    I am what HUD calls a tracer-been one for 10 years.
    I personally think our days are numbered-HUD doesn’t want us anymore.
    They want the $ to go unclaimed and keep it.
    About 40% of the refunds you see are incorrect-computed incorrectly by lender.
    Most know the front line employees could care less.
    They have hired a firm at taxpayer expense to “locate” eligible refunds-never run across them in 10 years-what do they do?

    If anyone out there has a question about HUD refunds-I am the one to ask!!

  5. I am just curious as to how many tracers there are out there.
    In my 10 years I have never run into one.
    Of course if people only knew it is a part time income at best.
    Anyone know?

  6. Carolyn,

    The HUD website I linked to in the article will let you search to see if your name is found. If so, a phone number is provided on that same website to call.

  7. I see it has been many months since the last comment, but I would appreciate a response if anyone reads this.
    A few years ago I worked as a tracer for several months in Utah and Idaho. My information source was a company in Boise called SmartTools. Their charges were very reasonable, and their customer support to their tracers was top-notch. I was considering doing it again after I quit, only to hear that someone took them to court and put them out of business. I couldn’t imagine why anyone would do that, or what anyone could gain by doing it. Reading what has been said here makes me wonder if the lawsuit was at HUD’s instigation. Does anyone know? I have wanted to get back into being a tracer again, but without SmartTools’ information I have not known how. Now I read here that HUD took down the list? Took down from where? How can anyone do it without that? If anyone is still doing this, I would appreciate hearing from you.

  8. I am still in the business. I will be checking back at this site to see if anyone will contact me after SmartTools left. I was lost too but I found all the back doors. What they are doing is giving out old dates which I’m working on now. Building my company won’t stop cause these people should have what is rightfully theirs. And I charge a low rate as well anyone who hired a tracer on here contact me and many more thanks hope you guys are still on here.

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