FHA Streamline Refinance Home Loan Mortgage Guidelines

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This BLOG On FHA Streamline Refinance Home Loan Mortgage Guidelines Was UPDATED On May 9th, 2019

What are the FHA guidelines for improving home mortgage refinancing

FHA Streamline Refinance Home Loan Requirements:

  • Mortgage rates across the board on all mortgage loan programs are at an 18 month high and there are no signs of a correction
  • Rumor has it that mortgage rates will go higher in the coming months and even more so next year
  • The economy is hot and there seems to be good news daily
  • Mortgage Rates are still low from the highs so there are still opportunities for homeowners to be able to benefit with FHA Streamline Refinance
  • Homeowners with an FHA loan can benefit from today’s FHA mortgage rates by doing an FHA streamline refinance

In this article, we will discuss and cover FHA Streamlines.

HUD Streamline Guidelines

FHA allows current borrowers with a current FHA loan and who have been current on their FHA mortgage payments in the past 12 months to do an FHA streamline refinance:

  • There are FHA Streamline Refinance Programs requires no minimum credit scores, no income verification, and no new appraisal
  • However, to get the best interest rates, borrowers with higher credit scores should go for the credit score only streamline

Many homeowners can save tens of thousands of dollars throughout the life of their loan by taking advantage of the current mortgage rates by refinancing their current FHA loan.

Qualifying For FHA Streamline Refinance Home Loan

How Qualifying For FHA Streamline Refinance Home Loan

The only qualification needed is that the main borrowers and co-borrowers be current on their FHA mortgage loan payments in the past 12 months.

  • Some lenders will allow a one time 30-day late payment in the past 12 months on their FHA mortgage payments

With streamline loans, no credit scores are required, no income verification is required, and no appraisal is required.

Qualifying For FHA Streamline Refinance Home Loan With Bad Credit

Yes.  The only credit criteria needed to qualify for an FHA streamline refinance is homeowners need to be current FHA loan payments timely for the past 12 months.

  • As mentioned above, some lenders will allow a one time 30-day late payment in the past 12 months
  • Other credit monthly payments do not matter

Homeowners can have been late on a car payment, credit cards, installment loans, and other creditors even in the past 12 months and as long their FHA loan monthly payment has been timely.

High Debt To Income Ratio, Can I Still Qualify For FHA Streamline Refinance?

Can I Still Qualify For FHA Streamline Refinance?

There is no income verification required to qualify for an FHA streamline refinance.

  • However,  borrowers do need to have full-time employment
  • Income will not be verified

Debt to income ratios will have no impact on an FHA streamline refinance.

Why Is New Appraisal Not Required?

FHA does not require a new appraisal. Since they already approved homeowner for an FHA loan with an FHA approved appraisal when they purchased the home, HUD figures they are safe:

  • FHA streamline refinance home loan is for rate and term only
  • Cash out is not allowed on streamlines
  • FHA figures if they insured borrower with a prior FHA appraisal, their collateral will still be safe

This is the reason they are waiving a new appraisal.

Other Guidelines On FHA Streamline

What other guidelines can be used to improve FHA

To be eligible for an FHA streamline refinance home loan, homeowners need a net tangible benefit of their current housing payment to be reduced by at least 5% or more.

  • If there is no net tangible benefit to the homeowner, they will not qualify for an FHA streamline refinance
  • For example, if current total monthly housing payment is $1,000, to qualify for an FHA streamline, new payment needs to be reduced to at least $950.00 or less

Closing costs on FHA streamlines can be covered by lender credit.

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