Refinance Authorization -Business Background

Refinance information is provided when Case Number Assignment is successfully processed for a refinance case. Afterward, the originating lender (or sponsor) can use Refinance Authorization to:

Update the projected closing date, contact name, and/or contact phone number
View refinance information

Note: Refinance Authorization information is not provided for a HECM refinance case.

Refinance Authorization provides the following key information:

One- and two-month projections of refinance credit, if upfront mortgage insurance premium (MIP) was paid on the prior case. Refinance credit is upfront MIP that was paid but not earned by HUD. It was formerly known as the refi netting amount. When an FHA-insured loan (case) is refinanced and an upfront MIP payment is remitted for the new case, refinance credit from the prior case is applied to the new case. This is only applicable if the borrower applies for FHA insurance for the new loan. Refinance Authorization provides 30-day and 60-day calculations based on the projected closing date of the new loan.
Refinance Authorization Number. Assignment of this number indicates approval to refinance the prior FHA-insured loan as a new FHA-insured loan. When the new case is endorsed, the FHA insurance for the prior loan is terminated. The refinance authorization expires at the end of the month following the projected closing date. For example, if the projected closing date is 06/01/20, the refinance authorization expiration date is 07/31/20. If upfront MIP is required, the refinance authorization number must be included with the upfront MIP payment for the new case. When the upfront MIP payment is made, a conditional termination of the FHA insurance for the prior loan is triggered. Any refinance credit on the prior case is automatically applied to the new case. Conditional termination means the insurance for the old loan is flagged for termination upon endorsement of the new case.

You can use Refinance Authorization only for the new case. The new case must have an FHA case number and be nonendorsed. Refinance Authorization cannot be used if the borrower is applying for a conventional loan. In this situation, a refund to the borrower (home owner) may be in order for any refinance credit on the prior case.

If the new case is not endorsed before the refinance authorization expiration date, use Refinance Authorization to change the projected closing date and thereby extend the expiration date. This must be done before the expiration date is reached.

You can access Refinance Authorization through the following sequence of FHA Connection links: Single Family FHA, Single Family Origination, Case Processing, and Refinance Authorization.

Refinance Authorization -Business Background

See Also