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What is the FHA Streamline Refinance Program?

The FHA streamline refinance program was designed to provide a fast and easy process for current FHA insured home loan borrowers to take advantage of historically low interest rates. Homeowners with current loan types including conventional or Fannie Mae/ Freddie Mac do not qualify for this program. There are other programs such as HARP for Fannie Mae/ Freddie Mac streamline refinances. Homeowners, who currently have FHA insured loan established prior to May 31st 2009, may be eligible for the FHA streamline refinance program. The process is streamlined and may not require an appraisal, there are limited or no income verification requirements, and no minimum credit score requirements. Since this program was designed for responsible homeowners, the payment history over the previous 12 months must be perfect. The FHA streamline program is a rate and term only so there is no cash out and the loan amount cannot be raised.

Do I qualify for the FHA Streamline Refinance Program?

In order to qualify for the FHA Streamline Refinance all of the following conditions must apply:

  • The borrower must be current on mortgage payments within the last 6 months and can have no more than 1×30 day late payment within the last 12 months.
  • The current loan must be a FHA insured loan
  • There needs to be enough tangible benefit from refinancing the loan
  • There is no cash out for the FHA streamline refinance only rate/term

There needs to be benefit in order to qualify for the FHA streamline refinance. This benefit may be lowering the interest rate, lowering monthly payments, or shortening the loan term. Another allowable tangible benefit is to refinance from an adjustable rate mortgage to a fixed rate mortgage.

The largest group of homeowners who benefit from the FHA streamline refinance had their loan insured by FHA prior to May 31st 2009. The main reason for this is that borrowers can take advantage of lowering their previous MIP (mortgage insurance premium) when borrowers who established their loan after May 31st 2009 cannot.

What steps are necessary in order to apply for the FHA Streamline Refinance Program?

The process begins with filling out the form or calling to speak with your local FHA mortgage specialist. The process is fast and easy since many of the initial criteria are no longer required:

  • There are no employment or income verifications required
  • No appraisal is needed as the LTV (loan to value) is unlimited
  • There is no minimum credit score requirement

Underwater homeowners with a FHA insurance loan have the ability to take advantage of this program. There are no maximum LTV (loan to value) requirements for the FHA streamline refinance and no appraisal necessary. This means as long as you are current with your mortgage payments over the last 12 months, you may qualify for the FHA streamline refinance.

Since FHA‘s primary function is to insure mortgage loans, not to originate loans, there are incentives to take advantage of lower interest rates for both FHA and for borrowers. The advantage for borrowers is that a lower interest rate with the same loan term lowers monthly payments. Another option for borrower to take advantage of lower interest rates is to shorten the loan term at the current monthly payment amount. The advantage for FHA is reducing monthly mortgage payments for borrowers, allow for less default loans and less risk for underwater homeowners intentionally falling behind on payments or going into foreclosure.

The best way to determine your eligibility is to fill out the form or call to speak with a local OC mortgage specialist today.

Please note that My OC Mortgage is not a mortgage lender. This is not, and is not intended to be a mortgage application. Once you have completed this online inquiry (information request form) your information will be sent to our participating lenders. The lender will contact you by phone, automated calling, and/or email. By submitting your expression of interest you are consenting to receive telephone calls from our participating lenders even if you have previously listed yourself on any internal company, state or federal Do-Not-Call list.