FHA Streamline Refinance
What is an FHA Streamline Refinance?
The two main features of this unique refinancing program are:
- You must already be an FHA-insured homeowner to qualify1.
- An FHA Streamline Refinance might not require a home appraisal.
Other requirements for an FHA Streamline Refinance include the following:
- Principal residence: The homeowners must be using the home as their principal residence.
- A perfect 12-month payment history: No 30-day, 60-day, or 90-day late payments are allowed. Existing loans must be current at the time of closing.
- A 210-day waiting period between refinances: The FHA requires that borrowers make six mortgage payments on their current FHA-insured loan and that 210 days (about seven months) pass from the most recent closing date in order to be eligible for an FHA Streamline Refinance.
- “Net tangible benefit”: Applicants must demonstrate that the refinancing has an allowable net tangible benefit, which is generally defined as reducing the [principal + interest + mortgage insurance] component of the mortgage payment by 5% or more. Another allowable net tangible benefit is refinancing from an Adjustable-Rate Mortgage (ARM) to a Fixed-Rate Mortgage. Note that taking cash out to pay bills is not an allowable net tangible benefit.
- Other requirements and costs may apply.
What are the benefits of an FHA Streamline Refinance?
- Speed: If you qualify for an FHA Streamline Refinance, it is typically the fastest, simplest way to refinance your mortgage.
- Rates: An FHA Streamline Refinance is available as a Fixed-Rate Mortgage and ARM. FHA Streamline Refinance rates are as low as those for regular FHA mortgages.
- 15- or 30-year terms.
- No prepayment penalty.
- No income verification required.
Who may benefit from an FHA Streamline Refinance?
Again, only those who are FHA-insured homeowners and who meet the other requirements outlined above are qualified for an FHA Streamline Refinance. Given that verification of income is not required, an FHA Streamline Refinance may be of particular benefit to those with lower incomes; however, the homeowner obviously must be able to pay the refinancing costs and make the monthly payments.
For more information
Contact your Loan Officer today to see if an FHA Streamline Refinance may be right for you. We take pride in delivering value and savings to homeowners across the United States. It would be a pleasure to help.
Visit the “Streamline Your FHA Mortgage” article at the website of the U.S. Department of Housing and Urban Development (HUD).
Visit the Federal Reserve Board’s online publication, A Consumer’s Guide to Mortgage Refinancings, at http://www.federalreserve.gov/pubs/refinancings/default.htm.
1If you currently have a non-FHA loan, you may consider refinancing with an FHA refinance loan, but this will not be an FHA Streamline Refinance. You’ll need to apply with the usual employment verification, credit check, debt ratio requirements, etc. Academy can help you determine if this may be a beneficial option for you.