From time to time, I am asked "I have a second mortgage. Is it possible to streamline the 2nd mortgage?"
And the answer is "no".
What this tells me though is that FHA has done a good job of marketing the FHA streamline program because people are starting to ask for it by name.
The FHA streamline refinance program was designed to allow eligible FHA borrowers to take advantage of lower interest rates when they are available without having to completely re-qualify for a new loan - ON THEIR FIRST LOAN ONLY.
When doing an FHA streamline refinance on your first mortgage, if you have a second mortgage, the second mortgage is not eligible for the FHA streamline refinance program. FHA doesn’t insure second mortgages, so your second mortgage is not FHA insured - thus, it is not eligible for the FHA streamline program.
When you participate in the FHA streamline refinance program and you have a second mortgage, the lender of your second mortgage must agree to subordinate the second mortgage - meaning they have to agree to remain in 2nd position while you refinance the first mortgage.
It is getting more difficult to get lenders who are holding second mortgages to allow people to refinance their first with the FHA streamline refinance program, but it is not impossible. Each situation is different - you cannot get an answer on your situation until you speak with the holder of your second mortgage.
Can you streamline your second mortgage?
But you can still participate in the FHA Streamline program if you have a second mortgage...