How do I determine the start date for interest collection?

The Mortgagee may collect per diem interest from the disbursement date to the date amortization begins.

Alternatively, the Mortgagee may begin amortization up to 7 days prior to the disbursement date and provide a per diem interest credit.

Any per diem interest credit may not be used to meet the borrower’s minimum required investment (MRI).

Per diem interest must be computed using a factor of 1/365th of the annual rate. 

For additional information see Handbook 4000.1 II.A.6.a.xii. 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-04523