What is FHA Streamline Refinance Loan Program?

Most homeowners today are under water (value of home is less than owed).  As of June 11, 2012 – FHA has created the FHA Streamline Refinance Loan Program for homeowners that have an existing FHA mortgage.   This type of loan program was created and designed to lower monthly principal and interest payments. What makes this program appealing to homeowners is that it does not require an appraisal.  FHA allows for unlimited loan-to-value under the guidelines of the FHA Streamline Refinance Loan Program.  This is a huge help for homeowners in states that have been hit hardest in real estate.   States such as California, Florida, Nevada, and Georgia.

General Criteria for FHA Streamline Refinance Loan Program

Primary Homes

• Refinanced at current FHA mortgage rates

• Borrow must be current on mortgage payments at the time of loan application

• Made at least 6 months of payments

• Must be at least 210 days “waiting period” from closing date to be able to refinance

• Loan less than 12 months borrower had to make all payments in the month due on time

• More than 12 months – borrower has no more than one 30 day late payment in the last 12 months, AND made all payments during the month due for the last three months

• Lender must determine a net tangible benefit- this means that the reduction of principal, interest, and Mortgage Insurance is 5% or greater.

• No verifications of income, employment, or credit

• Loan balances may not increase to cover loan costs- The FHA will not allow increasing a Streamline Refinance balance to cover loan charges.

• Loan costs such as origination charges, title charges, escrow…– must be either paid by borrower atclosing

• The loan costs can be credited by the loan officer in full. If there is a credit it is called a “Zero-Cost FHA Streamline.”- check with your lender for available options

Investment or Second Homes

• Must meet all FHA Streaminline Refinance Loan Programguidelines under a primary residence

• Investment/second homes do not need an appraisal

• May not be refinanced into an ARM

If you have an FHA loan this is a great program.  No appraisal, verification of income, employment, or credit is a huge plus.  As long as you are current on your loan and more than 210 days after your closing you can apply.