Could the federal government’s booming FHA mortgage program be forcing homeowners to pay tens of millions of dollars of extra interest charges when they sell their houses or refinance loans?

Critics say yes. The government says the critics aren’t providing the full picture.

Those critics include Sen. Ben Cardin (D-Md.), who is sponsoring legislation that would prohibit FHA lenders from collecting a full month’s worth of interest from sellers and refinancers who pay off their mortgages — go to settlement — before the final day of the month.

No other major source of financing, not Fannie Mae, Freddie Mac or the Veterans Affairs Department, requires interest payments from borrowers beyond the date they pay off their loans. On an FHA loan, if you sell your house and go to closing early in the month, you are charged interest through the rest of the month.

To illustrate: Say you pay off a $200,000 FHA-insured mortgage on the fifth day of April. You’ll be charged an extra $820 to cover interest for the month’s remaining days, according to estimates prepared by the National Association of Realtors, which supports Cardin’s bill.

If the same loan is paid off on April 15, the interest levy would total $492.

Where does the money go? Ted Tozer, president of the Government National Mortgage Association, which bundles FHA loans into bonds and sells them to investors, says it flows to bondholders, who are guaranteed payment of interest for the full month even if the balance is paid off much earlier.

Tozer maintains that the direct payment approach has afforded FHA borrowers a slight discount on their initial interest rates, probably in the range of 0.10 percent to 0.15 percent, compared with conventional loans.

But critics charge that the extra interest taken from FHA sellers and refinancers exerts a far greater personal economic impact — often cutting their proceeds by hundreds of dollars — than the barely perceptible rate break they received on the mortgage itself.

“This is an issue of fairness,” Cardin says. “Homeowners should not have to pay interest on loans that they have fully repaid.”

His bill, the Reduce Excessive Payments Act, would prohibit the practice and require FHA lenders to compute payoffs on a per-diem basis rather than a full-month basis.

Real estate agents are especially critical of FHA’s interest-prepayment policy, because they say it squeezes money out of sellers who have little or no control over the timing of their closing transaction. Many have no idea of the FHA’s requirement, realty agents say, but even if they do, the buyers of their houses generally are in a better position to control the date of settlement because they are dealing directly with title and escrow companies.

The National Association of Realtors says the out-of-pocket costs to unwary consumers are huge. Citing the most recent statistics on early payoffs it claims it could obtain from FHA, the group says that during the year 2003 alone:

l FHA borrowers paid $587.4 million in “excess interest fees” because of the full-month rule.

l Only 16 percent of loans were prepaid during the final five days of the month.

l The average “excess interest” payment from borrowers to lenders and investors was $528, but 425,000 homeowners paid an average $622 in extra fees.

Between January 2000 and January 2004, according to the Realtors’ analysis of FHA data, borrowers paid more than $1.38 billion in excessive interest. The corresponding amounts today could be significantly higher, because FHA has a much larger market share.

Asked for comment, Vicki Bott, who heads FHA’s single-family mortgage office, acknowledged the controversy and said that the agency is “examining this issue very closely” and actively considering a regulatory change.

In an interview, Tozer said the entire issue is up to FHA, and that his agency could readily sell its mortgage-backed bonds using the per-diem payoff approach that is standard in the conventional-mortgage marketplace. But investors would still need to be compensated for the full month’s worth of interest, he said, and that would probably require a slightly higher rate on the mortgage.

Where’s this headed? With pressure coming from Congress — notably from an influential Democrat who tends to be supportive of the Obama administration’s policies — FHA may move off its disputed practice.

In the meantime, if you have an FHA loan and plan to refinance or sell your house, try hard to schedule the closing at the end of the month. You could save a bundle.