Sec. 05.06.01.14. Fees and Premiums

A. Application Fee.

(1) The sponsor shall pay an application fee equal to the greater of:

(a) 1/10 of 1 percent (0.1 percent) of the loan amount for which insurance is requested; or

(b) $1,000.

(2) The application fee shall be paid to the Fund at the time the application for insurance is submitted by the lender. The Secretary may waive or postpone the time for payment of an application fee in the Secretary's sole discretion.

(3) The application fee shall be calculated at the time of application on the amount of the loan or part of it for which insurance is requested. Any adjustment for overpayment or underpayment shall be paid by or credited to the borrower at initial endorsement, provided that, at the sole discretion of the Fund, any overpayment may be credited towards the initial mortgage insurance premium.

(4) The application fee for an existing insured loan being refinanced out of refunding bonds is the greater of:

(a) $500; or

(b) 1 percent of any increase to the insured loan amount.

(5) Refund.

(a) Up to 1/2 of the application fee may be refunded within 60 days of the sponsor's submission of an application if the:

(i) Fund rejects the application upon initial review; or

(ii) Sponsor submits a written request to withdraw the application.

(b) Refunds may not be made after 60 days from application submission.

B. Commitment Extension Fees. A nonrefundable commitment extension fee of 1/20 of 1 percent (0.05 percent) of the loan amount for which insurance is requested may be charged by the Fund for each extension by the Fund of its commitment to insure a loan, under Regulation .18H of this chapter.

C. Closing Fees. The Fund may charge fees to cover costs of closing a loan, including administrative and legal costs associated with endorsement of a loan for insurance. The closing fees may be paid at loan closing and may be paid with proceeds of the loan.

D. Insurance Premiums.

(1) Construction Advances.

(a) The premium for insurance of a loan for construction advances is 1 percent of the total loan amount for each year or partial year within the construction period, and shall be paid to the Fund in full at the time of initial endorsement.

(b) If the construction period is less than 24 months, that portion of the prepaid construction premium for each full calendar month after the final endorsement of the insured loan shall be credited to the initial permanent mortgage insurance premium.

(c) If the construction period is extended after the initial 24 months, the premium for insurance of the loan for construction advances during the extension period is 1 percent of the insured loan amount, and shall be paid to the Fund in full before the extension period.

(2) Permanent Loans.

(a) The initial mortgage insurance premium is 1/2 of 1 percent (0.5 percent) of the insured permanent loan and shall be paid to the Fund at the time of endorsement of the insured loan for permanent mortgage insurance.

(b) The annual renewal premium is 1/2 of 1 percent (0.5 percent) of the outstanding principal balance of the insured permanent loan.

(c) When a permanent loan is insured by the Fund following Fund insurance of a construction loan:

(i) The construction period shall continue until the final endorsement of the insured loan for permanent mortgage insurance; and

(ii) Only the annual renewal premium, not the initial premium, for the permanent mortgage insurance shall be charged.

E. Modification of Premium Rates.

(1) The Fund may participate in a plan of shared insurance, coinsurance, or reinsurance under this regulation. In each of these instances, the Fund may charge an initial premium and annual renewal premium which is in excess of the standard mortgage insurance premiums set forth in §D(2) of this regulation. The Fund shall determine the amount of the excess premium in its sole discretion based on its analysis of the insurance risks.

(2) If the Fund insures a loan when a portion of the insurance provided is supported by collateral deposited with the Fund, including loans in excess of the maximum insurable amount under Regulation .09B of this chapter, the Fund may charge an increased premium under §E(1) of this regulation, or may in its sole discretion reduce the annual mortgage insurance premium based on its analysis of the insurance risks. The Fund may reduce the annual mortgage insurance premium payable on the entire insured loan by not more than the product of 1/2 of the collateral deposited for the annual period, multiplied by the percentage rate for the applicable insurance premium.

F. The premium, or any portion of it, is not refundable except when an insured loan is paid in full. If a loan is prepaid in full, no further premium is due and a portion of the premium paid for the year shall be refunded, as prorated on a monthly basis.

G. Insurance Fees and Premiums.

MHF Approved Lender	Eligible Borrower	Extent of Coverage	Fees	Initial Premium (12 months)	Annual Renewal Premium
CONSTRUCTION LOAN Public Agency Lender	NP or Public LD FP/Other	100 Percent 100 Percent 100 Percent	Application fee: Greater of 1/10 of 1 percent or $1,000 for all; Commitment extension fee: 0.05 percent	1 percent for 12 months for all*	1.25 percent for all*
Conventional Lender	NP LD FP/Other	25 percent* 20 percent* 20 percent*
PERMANENT LOAN Public Agency Lender	NP or Public LD FP/Other	100 Percent 100 Percent 100 Percent	Application fee: Greater of 1/10 of 1 percent or $1,000 for all; Commitment extension fee: 0.05 percent	0.5 percent 0.5 percent _ of 1 percent	½ of 1 percent* ½ of 1 percent* ½ of 1 percent*
Conventional Lender	NP LD FP/Other	25 percent* 20 percent* 20 percent*		0.75 percent* 0.75 percent* 1 percent	½ of 1 percent* ½ of 1 percent* ½ of 1 percent*