*UPDATE* This incredible refinance offer is now set to expire. You will need to contact us by Thursday, June 21, 2012.  Click here to see if you qualify for this FHA Streamline Refinance.

In an update to guidelines, the FHA eliminated verification for nearly everything on an FHA Streamline Refinance mortgage application.  There is now no verification of income or employment!

What Is An FHA Streamline Refinance?

The FHA Streamline Refinance is a special mortgage product, reserved for homeowners with existing FHA mortgages. Homeowners with conventional mortgages via Fannie Mae or Freddie can’t use it. FHA Streamline Refinances are the fastest, simplest way for FHA-insured homeowners to refinance their respective mortgages.

The FHA Streamline Refinance program’s defining characteristic is that it does not require a home appraisal. Instead, the FHA will allow you to use your original purchase price as your home’s current value, regardless of what your home is actually worth today.

In this way, with its FHA Streamline Refinance program, the FHA does not care if you are underwater on your mortgage. In fact, the program encourages underwater mortgages. Even if you owe twice what your home is now worth, the FHA will refinance your home without added cost or penalty.

The FHA allows for unlimited loan-to-value with its Streamline Refi program — a huge help to FHA homeowners in places like Florida, California, Arizona and Georgia.

Except for this “no appraisal” benefit, the FHA Streamline Refinance is very much like other loan products. It’s available as a fixed rate or adjustable mortgage; it comes with 15- or 30-year terms; and there’s no prepayment penalty to worry about.

Another big plus is that FHA mortgage rates are as low with the Streamline Refinance program as with “regular” FHA loans.

Click here to see if you qualify for an FHA Streamline Refinance.

*UPDATE* This incredible refinance offer is now set to expire. You will need to contact us by Thursday, June 21, 2012.  Click here to see if you qualify for this FHA Streamline Refinance.

Are You FHA Streamline Refinance Eligible?

Although the FHA Streamline Refinance eschews the “traditional” mortgage verifications of income and credit score, as examples, the program does enforce minimum standards for applicants. The official FHA Streamline Refinance guidelines are below.

Perfect, 12-Month Payment History Is Required

The FHA’s main goal is to reduce its overall loan pool risk. Therefore, it’s number one qualification standard is that homeowners using the Streamline Refinance program must have a perfect payment history stretching back 12 months. 30-day, 60-day, and 90-day lates are not allowed. Furthermore, loans must be current at the time of closing.

210-Day “Waiting Period” Between Refinances

The FHA requires that borrowers make 6 mortgage payments on their current FHA-insured loan, and that 210 days pass from the most recent closing date, in order to be eligible for a Streamline Refinance.

Employment And Income Are Not Verified

The FHA does not require verification of a borrower’s employment or annual income as part of the FHA Streamline process. There is no Verification of Employment, nor are there paystubs, W-2s or tax returns required for approval. You can be unemployed and get approved for a FHA Streamline Refinance so long as you still meet the other program requirements.

The Refinance Must Have “Purpose”

Streamline Refinance applicants must demonstrate that there’s a Net Tangible Benefit in the refinance; a legitimate reason for refinancing. Loosely, Net Tangible Benefit is defined as reducing the (principal + interest + mortgage insurance) component of the mortgage payment by 5 percent or more. Another allowable Net Tangible Benefit is to refinance from an adjusting ARM into a fixed rate loan. Taking “cash out” to pay bills is not an allowable Net Tangible Benefit.

Loan Balances May Not Increase To Cover Loan Costs

The FHA prohibits increasing a Streamline Refinance’s loan balance to cover associated loan charges. The new loan balance is limited by the math formula of (Current Principal Balance + Upfront Mortgage Insurance Premium). All other costs — origination charges, title charges, escrow population — must be either (1) Paid by the borrower as cash at closing, or (2) Credited by the loan officer in full. The latter is called a “zero-cost FHA Streamline”. Click here for a zero-cost FHA Streamline Refinance rate quote.

Appraisals Not Required

The FHA isn’t concerned about home value — it’s insuring your loan regardless. Therefore, the FHA does not require appraisals for its Streamline Refinance program. Instead, it uses the original purchase price of your home, or the most recent appraised value, as its valuation point. Homes that are underwater are still FHA Streamline-eligible.

FHA Streamline Refinance Mortgage Insurance Requirements

The FHA Streamline Refinance is an FHA-insured mortgage, and FHA borrowers are required to make two types of mortgage insurance payments — an upfront mortgage insurance payment paid at closing, plus an annual one split into 12 installments, paid with your mortgage payment each month.

With respect to mortgage insurance premiums, as of June 11, 2012, homeowners using the FHA Streamline Refinance program are split into two classes :

  1. Homeowners whose new loan replaces an FHA-backed mortgages endorsed before June 1, 2009
  2. Homeowners whose new loan replaces FHA-backed mortgages endorsed on or after June 1, 2009.

Beginning June 11, 2012, homeowners in the first class — those with”old” FHA mortgages to refinance — will pay markedly lower mortgage insurance than homeowners in the second class of borrowers.

*UPDATE* This incredible refinance offer is now set to expire. You will need to contact us by Thursday, June 21, 2012.  Click here to see if you qualify for this FHA Streamline Refinance.