If you had Upfront Mortgage Insurance on FHA mortgages signed on or after December 8, 2004, you would not be entitled to a refund from the FHA on your Upfront Mortgage Insurance.

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Are You Entitled to a Refund From the FHA?

In the past, the FHA paid out refunds on Upfront Mortgage Insurance premiums in certain circumstances, but ended the practice when President George Bush signed legislation to eliminate the refunds. If you had Upfront Mortgage Insurance on FHA mortgages signed on or after December 8, 2004, you would not be entitled to a refund from the FHA on your Upfront Mortgage Insurance.

However, there are exceptions for those who got loans with Upfront Mortgage Insurance prior to that date. Are you an FHA loan holder? You may be entitled to a refund if your FHA loan started after 1 September 1983, but before December 8, 2004. You may be eligible for an FHA refund if you paid an upfront mortgage insurance premium as part of closing on the house and did not default on your FHA mortgage payments.

FHA mortgage holders who have loans dated after December 8, 2004 are still entitled to a refund of their Upfront Mortgage Insurance premiums--but only if they refinance to another mortgage insured by the FHA.

Many homeowners receive e-mails or postal solicitations about such refunds. Third party companies with a "refund locator" service may try contacting you with a message that you could be entitled a large refund by the FHA. These companies may claim you are only entitled to your refund if you refinance your home or if you pay the third party company a fee to "track down" or "trace" your FHA refund.

This is simply NOT TRUE. Don't rely on a third party to "trace" your refund--call the Department of Housing and Urban Development to learn more about your eligibility for an FHA mortgage insurance premium refund. The HUD hotline number is 1-800-697-6967.

The FHA warns consumers that there is no need to pay for help getting refund money from the FHA--the government does not endorse third party tracer programs. In fact, in some cases it may be to your advantage not to take a direct payment of this refund. As stated before, that FHA-to-FHA refinances allow you to transfer FHA refund money to pay for the upfront mortgage insurance premium on FHA refinancing--a good way you can offset the up front costs of an FHA loan. But first you need to determine whether you're eligible for the refund or not. Contact HUD to learn more--and say no to third party "refund tracker" companies.