The FHA Streamline Loan: It Was Fun While It Lasted
Posted on November 18 By Justin McHood
Even though the official name "FHA Streamline" still exists, the FHA streamline refinance of today is very different than it was last week.
Or for the last decade or so for that matter.
As of November 17, 2009 the FHA streamline loan now requires the following items (and more) but these three are the big ones that will prevent many people from being able to refinance:
- A verification of employment
- A verification of income
- An appraisal if you are going to "roll in" any of your closing costs
Prior to the FHA streamline changes, FHA really wanted to help homeowners who were currently in an FHA loan lower their monthly mortgage payments. If they didn't have enough cash on hand to cover the closing costs, it wasn't a problem, they could roll them into the new loan. If their house had went down in value (a common thing in many areas like Arizona, Florida, California, Nevada, etc.) it wasn't a problem either - no appraisal was required.
But with the FHA streamline guideline changes, I think it is safe to say that the real Streamline no longer exists.
The "New Streamline" Guidelines include:
- Seasoning Requirements
- Payment history
- Net tangible benefit for the borrower
- Maximum Combined Loan-to-Value
- New Maximum Mortgage Amount for Streamline Refinances WITHOUT an Appraisal
- Discounts Points no longer included in Existing Debt for Streamline Refinances WITH an Appraisal
- Verification of any assets needed to close
- Certification that borrower is employed and has income
- Elimination of abbreviated Uniform Residential Loan Application (URLA)
(See HUD Official Announcement
So be ready to essentially provide everything that you provided when you first got your FHA loan whenever you want to do an FHA streamline refinance.
The old one is gone - and probably isn't coming back any time soon.
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