FHA Streamline Requirements
How do you qualify for an FHA streamline refinance? The qualifications vary from lender to lender so I can speak only for Novation’s offerings. Novation has the best of both worlds when it comes to offerings because we are both lender and broker. As such we have a wide offering of solutions for the FHA streamline programs made available to you.
While most lenders require a minimum credit score of 620 and some even require a minimum middle score of 660 we are still able to do FHA streamline refinances with no minimum credit score. Having said that here are the main qualifying points:
- You need to be current with your mortgage payments at the time of loan closing.
- You need to be employed with the likelihood of continued employment.
That’s about it. Yes, there are documents to sign and a closing to attend but if you meet those two requirements everything after that is, as they say, gravy. My name is Ken and I am more than happy to answer your questions about the FHA streamline refinance program for your home. Feel free to call me at 678-946-0101 and if I do not answer please leave a message along with your email address.
FHA Streamline 203(k) and You
Finding a home in your price range, in the neighborhood where you want to be, with the styling you desire, and with your person touch is all but impossible unless you have a home built. Then that price range thing has a tendency to get in the way. Enter the FHA streamline 203(k) home purchase and renovation program and you’ve got a very good shot of getting exactly what you want.
Take Sarah and Lee for example. They are purchasing a duplex in a wonderful southern neighborhood which needs about $30,000 in rehab and upgrades so the FHA streamline 203(k) is ideal for them. They still get the same low FHA interest rate but the costs of the renovation are financed into the loan meaning they only need the 3.5% down payment on the total loan amount.
The FHA streamline 203(k) also works for first time home buyers and works in conjunction with the Energy Efficient Mortgage and even works with the HUD $100 down payment program. Below are a few answers to questions about the FHA streamline 203(k) loan program:
You may do the work youself if you have verifiable work experience in that field but you may not be compensated for the labor only the materials.
Appliances may be financed with the FHA streamline 302(k) – they may also be financed with the Energy Efficient Mortgage (EEM).
A Cost Consultant may be required and could be well worth the investment. They help make sure your General Contractor is charging fair and going rates for material and labor costs.
Draws are available only according to the schedule set forth by the FHA streamline 203(k). If your General Contractor asks for more money from you do not give it to them. They will be paid on draw by the lender when the work is completed.
Make sure your General Contractor is reputable. If any suppliers or sub-contractors put a lien agains the property during the construction period the final distributions will not be made.
For more information about the FHA streamline 203(k) for Georgia and Florida homes call 866-946-0110 extension 101 or email me at 
.
Hope for Home Owners with a Fannie Mae Loan
Fannie Mae mortgagors have long been jealous of FHA mortgagors because they have the FHA streamline refinance. Enter the FNMA DU Refi Plus. If you have an existing Fannie Mae home mortgage which does not have mortgage insurance you can refinance all the way up to 105% of the appraised value of your home provided you are current with your mortgage payments, are currently employed and meet a couple of other criteria.
Even if you have a second mortgage you can qualify for the loan as long as the second mortgage holder with agree to re-subordinate the mortgage. There is no maximum combined loan to value (CLTV) on the DU Plus and so long as there is no mortgage insurance on the existing loan there is no mortgage insurance on the DU Plus.
Novation Mortgage will request the subordination agreement from your existing lender and you will only need to get involved if for some reason they refuse to agree to re-subordinate. Don’t worry if you do not fully understand what all that means. When you call I will explain it to you in detail. In fact I may explain it to you even if you think you already know so that I make sure I know you understand – as they say on TV “that’s just the way I roll.”
If your home is in Georgia or Florida and it is the home you live in full time (primary residence) don’t hesitate to call me at 678-946-0101 and ask about the Fannie Mae DU Refi Plus or the FHA streamline refinance.
Do Appraisal Changes Affect the FHA Streamline?
The question is not exactly on every home owner’s mind, yet. Once they have to go through the changed process, however, it will be. Delayed appraisals, increased appraisal costs and more red tape is the only real result expected from the HVCC. If I were an appraiser I would be livid about this new regulation because it is essentially an indictment against appraisers saying they are easily influenced to over-value properties. The question we address herein is how this new HVCC affects the FHA streamline refinance loan.
There are a couple of major changes affecting home valuation (appraisals) effective May 1, 2009. Perhaps the biggest change is the Home Valuation Code of Conduct (HVCC). I write this with a sigh for your sake as a borrower and offer what at first may seem like a confused view until you understand the need to protect both the borrower and the lender.? Unfortunately it hurts only the borrower through increased costs and delayed completion times.
Lenders and brokers are partly to blame for the creation of the HVCC but it is the home owner and not the lender or broker who will be hurt by the implementation. Like anything else when the laws regulating any activity are tightened the cost increases. Most appraisers are increasing the cost of appraisals by $50 to $100 for standard home appraisals. Larger homes, unique homes or rural homes can cost as much as $200 more with the new changes.
While I will not “blame” any of the costs and delays directly on the appraisal community I will say when we are able to order appraisals directly we are able to get them back more quickly. When we use existing third party “dispatch” companies appriasals generally cost about $100 more than when we order them directly because the dispatch company must be paid. Worse than the cost is the added time and we have had appraisals through third party dispatch companies require as much as 3 weeks where most directly ordered appraisals are completed within 2 or 3 days.
The cost goes to the home owner or home buyer and the delay affects all parties involved except the appraiser. We call on the appraisal community to help not treat you like an ATM machine and take your money without treating you like a valued customer. Not that we believe that happens in all circumstances but it certainly is much more likely when you/we are forced to change the way we operate because of a new regulation that will not have any good outcome.
The good news is the FHA streamline does not necessarily require an appraisal. The other news is almost every other loan, including the new Fannie Mae DU Refi Plus does require an appraisal which also includes the new 1004MC – but that is another subject for another post.
You can protest the HVCC by demanding it to be rescinded through contacting your state senator and representative.
Can I Refinance If …
Some of the questions make us snicker but then we realize the reason most people are in bad shape is because they didn’t take time to ask basic questions when they were getting into a loan that would put them into bad shape. Here are a couple of answers to various “can I refinance if” type questions.
Can I refinance if I have been late on payments?
Maybe. It depends on what type of payments you have been late on, how long ago your last late payment was and what type of loan you are applying for. For example some lenders will allow you to do an FHA streamline refinance if you have been late on payments including mortgage payments and others will not (Novation allows FHA streamline refinances so long as the mortgage is current at the time of closing).
Can I refinance if my home is currently listed for sale?
No. But Novation will allow a refinance with the listing canceled and a good explanation why it was listed then canceled. We will not allow a cash-out but only rate and term on recently listed properties.
Can I refinance if I have had a foreclosure?
Maybe. It depends on how long ago the foreclosure was. It does not matter if the foreclosure was a primary residence, second home or investment property. As of today there are no conventional loans outside of the FHA streamline refinance which will allow a refinance to anyone who has had a foreclosure within the last 36 months as of the date of application.
Can I refinance from a non-FHA loan using an FHA streamline?
No. The FHA streamline is designed only for FHA loan to FHA loan refinance. You can still do an FHA refinance but not using the FHA streamline. One reason to do this would be to do a rate and term refinance up to 95% of the appraised value or a cash out refinance up to 85% of the appraised value.
Can I refinance if I have only been renting the home?
Not unless you have a true lease/purchase that was set up and recorded that way. Then it will actually be treated as a purchase rather than a refinance. The old practice of refinancing a property into the renters name from the owner’s name is gone. That was a sub-prime guideline that died with sub-prime loans.
Can I refinance if I lost my job?
The FHA streamline and Fannie DU Plus refinances only require employment verification or 1 year of tax returns for self-employed borrowers. If you are W2′d and we cannot verify employment you likely cannot refinance.
Can I refinance if I got a divorce?
If your former spouse is on the loan and on the title you will have to have a Quite Claim Deed and you will have to do a non-streamline refinance. You will have to qualify for the loan without your former spouse’s credit or income. You can use alimony and child support as supporting income provided there is a history of on-time payments and a future of realistic expectations you will continue to receive them.
If you are the type who likes to do all the research you can online before you start calling around let me remind you that (a) the mortgage banking industry changes every day – what was true today (April 9, 2009) may not be true even one day later (b) there are a dozen inexperienced loan officers in the business publishing information to every 1 who has 10 years or more of accurate experience (c) I have met people who claim to have decades of experience who are consistent in their errors. I belong to a group of professional mortgage bankers who spend much of our time critiquing each other and weighing one another against the truth. That helps guaranty our accuracy and honesty to you.
You can keep reading or you can pick up your phone and call me directly at 678-946-0101. We service the Georgia and Florida residential real estate markets and through my group of mortgage banking masters I am sure I can refer you to one of them if you are not in my area of practice or expertise.
5 Things You Must Know About FHA Streamline
Knowing FHA streamline refinancing can be confusing to a few is simple to understand when your website is dancing in and out of the top listings on Google for the search term. While we only offer FHA streamlines in the southeast and specifically Georgia and Florida I still get emails, Twitter messages, questions on Facebook and direct phone calls about the topic. There are five points you need to know if you are thinking about an FHA streamline refinance that will save you a lot of research. Knowing it comes from someone who has closed over 3000 loans and who is the licensed FHA lender will give you confidence in the answers.
- You must have an existing FHA home loan to use an FHA streamline refinance. If you do not have an existing FHA home loan you can still refinance using an FHA loan but it will not be a streamline and will require all of the normal qualifications.
- You cannot be behind in your payments at the time of refinance. Many lenders require that you not have been late in the last 12 months or not have been late more than 1 or 2 times. We are still able to do the FHA streamline in Georgia and most of Florida even if you have been late but are current at the time of application and closing.
- You may not leave the closing table with more than $500 cash back from the refinance. Anything more than this and it becomes a cash-out refinance which is neither the goal nor intent of the streamline refinance.
- The end result must be to lower your monthly P&I payment. This generally requires that you have been in your existing loan for a year or more and/or you are lowering your interest rate by at least .5%
- The FHA streamline refinance is not a “free” loan. In other words there are closing costs associated with the loan which must be paid either from the proceeds of the loan or from the pocket of the home owners. Usually there is enough rebate from existing mortgage insurance and equity to refinance without bringing any cash to close and still resulting in a lower payment.
There are of course many other things you will need to know but these five points are among the most common answers to frequently asked questions. If you are in Georgia or Florida we can offer you an FHA streamline refinance with no credit check, no income verification (simple employment verification is required), no asset documentation, and no appraisal in most cases. Call me or one of my staff associates at 678-946-0100 or send an email to ken AT novationmortgage.com
Who Can Use an FHA Streamline Refinance?
If you have an existing FHA home loan and you are current with your mortgage payments at the time of application and closing you can use an FHA streamline refinance to pay off your existing FHA home loan. The end result must be that your PITI is lower which almost always results from a lower interest rate. You cannot take cash out (limited to $500 leaving from the closing table) from an FHA streamline refinance.
Qualifying for an FHA streamline refinance is simple and in Georgia and Florida we can help you with no application fee. Call us at 678-946-0100
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