Streamline Refinancing with an FHA Loan

March 31, 2009 · Filed Under FHA, FHA Loan · Comment 

Since 1934, The Federal Housing Administration has been helping Americans become homeowners. In 1934 the Americans were experiencing difficult financial times; times similar to the ones we are living in today. The FHA continues to work for its commitment to help American citizens buy and keep their homes. One plan available to help American keep their homes is the Streamline Refinance Program.

The FHA Streamline Refinance Loan has been available since the early 1980’s. The term Streamline refers to the minimal amount of paperwork required to originate and underwrite the loan. Streamline loans can occur with or without an appraisal and may not require credit underwriting. It may be possible to add or subtract names to title.

In general the following qualifications must be met to streamline a loan:

  • The current mortgage that is being refinanced must be an FHA insured loan
  • The mortgage being refinanced must be current (not delinquent)
  • The refinance must result in a lower monthly payment
  • No cash may be taken out on a streamline refinance

Some lenders may offer a “no cost” streamline refinance. This is possible in a few ways. By offering a slightly higher interest rate, the lender pays closing costs from the increased interest. Lenders may also include the closing costs in the new loan amount. This is only possible if there is sufficient equity in the home as determined by an appraisal, or if there is no appraisal, it may be possible if the new loan amount is lower than the original loan amount.

The FHA is committed to keeping Americans in their homes. You can turn to a HUD approved counselor for help with all your mortgage loan needs.

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