There are two streamline options available:
Credit Qualifying – The lender will perform a credit and capacity analysis, but no appraisal is required.
Non-Credit Qualifying – The lender does not need to perform a credit or capacity analysis or obtain an appraisal. An abbreviated Uniform Residential Loan Application (URLA) may be used by the lender.
On the date of the FHA case number assignment:
- the Borrower must have made at least 6 payments;
- at least 6 full months must have passed since the first payment due date;
- at least 210 Days must have passed from the Disbursement Date; and
- if the mortgage being refinanced was assumed, 6 payments must have been made since assumption.
The streamline refinance must result in a Net Tangible Benefit to the borrower:
- reduced Combined Rate (the interest rate on the mortgage plus the Mortgage Insurance Premium (MIP) rate), and/or
- reduced term if the new interest rate does not exceed the current interest rate and the payment does not increase by more than $50.00, and/or
- change from an Adjustable Rate Mortgage (ARM) to a fixed rate resulting in a financial benefit to the Borrower.
However, if a Streamline Refinance is being processed with a Reduction in Term, the Net Tangible Benefit is met if all of the following apply:
- the remaining amortization period of the existing Mortgage is reduced; and
- the new interest rate does not exceed the current interest rate; and
- the combined principal, interest and MIP payment of the new Mortgage does not exceed the combined principal, interest and MIP of the refinanced Mortgage by more than $50.
A table outlining the net tangible benefit standards is available in Handbook 4000.1. II.A.8.d.vi.(C)(4)(c)(ii).
Find an FHA-approved lender in your area by visiting https://www.hud.gov/program_offices/housing/sfh/lender/lenderlist
For additional information see Handbook 4000.1:II.A.8.d available at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh