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Reference HOC Reference Guide – Chapter 2, Page 2-6 and HUD Handbook 4155.1, 5.A.2.i. Principal Reductions Question 49: If I discover the loan we closed is over-insured, how do I calculate the principal reduction?

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Reference HOC Reference Guide – Chapter 2, Page 2-6 and HUD Handbook 4155.1, 5.A.2.i. Principal Reductions Question 49: If I discover the loan we closed is over-insured, how do I calculate the principal reduction?

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Recalculate the base loan amount and the UFMIP to determine the new loan amount. This amount should be subtracted from the closed loan amount to reduce the principal.

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