Can I include costs for taxes and insurance in the new loan?

Prepaid items may include flood and hazard insurance premiums, Mortgage Insurance Premiums (MIP), real estate taxes, and per diem interest. They must comply with the requirements of the Consumer Financial Protection Bureau (CFPB). 

Prepaid items may be included in the mortgage for Simple Refinance, Rate and Term Refinance, and Cash-Out Refinance transactions.  Closing costs, prepaid items and other fees may not be applied towards the borrower’s Minimum Required Investment (MRI).   

For additional information see Handbook 4000.1  II.A.4.d.i; II.A.4.d.i.(B)(2)(c); II.A.5.c.i; II.A.5.c.i.(B)(2)(c); II.A.8.d. available at

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-04475