Refinancing an FHA loan into a new FHA loan within three years? See how much of your upfront mortgage insurance premium HUD credits back, what you still pay on the new loan, and what waiting a few more months costs.
Your current FHA loan
$
%
months
Your new FHA loan
$
%
Your refund
Upfront MIP refund credit
$0
Upfront premium left to pay on the new loan
$0
Upfront premium on your current loan—
Refund rate from HUD's chart—
Upfront premium on the new loan—
Credit lost for each month you wait—
Refund window—
Your credit if you close laterThe refund falls by 2% of the original premium every monthHow this is calculated
Upfront premium paid = original base loan × the upfront MIP rate (1.75% for current FHA loans).
Refund rate from HUD's chart (loans endorsed on or after December 8, 2004) = 82% − 2% × the month of the new closing, for months 1 to 36 (80% in month 1, 10% in month 36); 0% after month 36.
Refund credit = upfront premium paid × refund rate. Upfront premium left on the new loan = new base loan × new upfront rate − refund credit (not below $0).
When you refinance a current FHA loan into another FHA loan within three years, HUD credits back part of the upfront mortgage insurance premium (UFMIP) you paid. According to HUD Handbook 4155.2, chapter 7, the refund credit "may be applied to reduce the amount of the UFMIP paid on the refinanced loan". For loans endorsed on or after December 8, 2004, the refund is 80% of the original premium in the first month and falls by 2 percentage points every month, to 10% in month 36. After that there is nothing left to refund.
The credit is not paid to you in cash. HUD's FHA refund fact sheet says the refund "may be applied toward the up-front premium required for the new loan", and that loans endorsed on or after December 8, 2004 get no refund unless they are refinanced into a new FHA-insured loan. Selling the home, paying the loan off or refinancing into a conventional loan earns no refund. Your lender pulls the exact credit from FHA Connection, based on the projected closing date, so treat this result as an estimate. The new loan's upfront premium is 1.75% of the base loan under HUD Mortgagee Letter 2023-05. See the full month-by-month FHA UFMIP refund chart.
Common questions
How much of my FHA upfront MIP will I get back?
It depends on how many months the loan has been insured when the new FHA loan closes: 80% in month 1, 58% in month 12, 34% in month 24 and 10% in month 36. On a $300,000 base loan with a $5,250 premium, that is $4,200, $3,045, $1,785 and $525.
Do I get the UFMIP refund as a check?
No. For loans endorsed since December 8, 2004, the refund is only available as a credit toward the upfront premium on a new FHA loan. It is not paid out in cash.
Is there a refund if I refinance into a conventional loan or sell?
No. Refinancing out of FHA, selling the home or paying off the loan does not earn an upfront MIP refund on loans endorsed on or after December 8, 2004.
Does the refund change my monthly MIP?
No. The credit only lowers the upfront premium on the new loan. The new loan still pays annual MIP at the current HUD rates, which you can estimate in the FHA loan calculator.