FHA Streamline Refinance Guidelines

With FHA mortgage rates at all time lows, the Las Vegas FHA Streamline Refinance has become a popular loan in 2009.

Commonly referred to as an FHA Rate Reduction, No Cost Refi, FHA No Doc Loan, No Credit Qualifying Loan, or No Appraisal Refinance, the FHA Streamline’s main purpose is to reduce a homeowner’s current monthly payment.

Basically, the FHA Streamline Refinance Mortgage is a fairly straightforward program with limited qualifying and document requirements.

FHA Streamline Qualifying Bullets:

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Purpose – to lower current mortgage payment
FHA to FHA loans only
No Appraisal if new loan amount does not exceed old, excluding up-front MIP
No Income Verification required
No Asset Verification
No Credit Qualifying
Mortgage Lates – OK – at discretion of individual lenders
Current month’s payment is not due at closing
$500 max cash back to borrower
No Repairs Required
Investment properties OK
2nd Mortgage subordination allowed – no max combined LTV

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Frequently Asked FHA Streamline Questions:

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Q. Can I consolidate bills with an FHA streamline?

A. No – You may not consolidate bills or receive cash-out from an FHA streamline refinance. Cash out FHA refinances require full qualifying and are restricted by Loan-to-Value requirements. Max cash back to borrower at closing is $500.

Q. Is an appraisal required?

A. No- An appraisal is not required on an FHA streamline unless the new loan amount exceeds the old loan amount by 1.5%.

Q. Will my credit be checked?

A. As lending guidelines continue to get tighter, it is possible that more banks may request minimum fico scores. However, per FHA guidelines, a credit report is not required. Mortgage history is all that the FHA cares about at this point.

Q. Can I add or remove an individual from my loan on a streamline refinance?

A. You may add whomever you wish as long as that person meets the minimum credit requirements. If you remove an individual you must be able to prove that the person remaining on the loan has had and continues to have the ability to make the mortgage payment. In most cases a 6 month history will be required to show that person has been making the payment.

Q. What if I lost my job?

A. The FHA does require that employment is listed on the mortgage application unless the borrower is of retirement age.

Q. What if I don’t live in the property anymore?

A. Investment properties that were originally purchased as an owner occupied residence are eligible for the FHA Streamline refinance.

Q. How much does an FHA Streamline cost?

A. No-cost refi options depend on the mortgage rate that you choose. Either way, in most circumstances, borrowers do not have to come out of pocket with any fees.

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