if you collect a PMI reserve at closing is that charge considered a prepaid finance charge? What about UFMIP on an FHA loan; is that considered a prepaid finance charge?

PMI at closing is a PPFC. PMI for the rest of the loan is not a PPFC, but a FC.

Not sure what "UFMIP" is.

We are in the process of doing a loan. The President wants to waive the documenation fee which is usually a prepaid finance charge. In waiving that fee, we will be collecting prepaid interest instead. We are recalculating the APR if it is in tolerance, do we still need to redisclose since we dropped the doc fee and added interest?

Is this a home loan subject to MDIA? If so, did the APR change outside of tolerance? If so, you must redisclose and wait to close.

If no to these questions, you do not need to redisclose.

Most likely it's the same thing as "PMI at closing" in a non-FHA loan.


Waiving a fee that is a PFC will cause the APR to go down.

Odd days and the odd-days' interest charge are trickier. In the past, you waived the odd-days' interest charge, but you may or may not have ignored the odd days themselves. If you ignored both the odd days and the related interest charge and you now restore the charge and count the days, this change will have almost no impact on the APR. If, on the other hand, you were counting the (interest-free) odd days in the past and continue that practice, the addition of an interest charge (with no offsetting benefit) will cause the APR to go up.