Streamline FHA Mortgage Loan Program

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Since the early 1980's, FHA has permitted streamline refinances on insured mortgages. The "streamline" refers only to the amount of underwriting and documentation that needs to be performed by the lender, and doesn't mean that there are no costs involved in the transaction. The basic requirements of a streamline refinance are:

The refinance is to result in a lowering of the borrower's monthly interest and principal payments.

The mortgage to be refinanced should not be delinquent (be current).

The mortgage to be refinanced must already be FHA insured.

When using the streamline refinance process, no cash may be taken out on mortgages refinanced.

Lenders may offer streamline refinances in several ways. Some lenders offer "no cost" refinances (actually, no out-of-pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower paid or financed the closing costs in cash. From this premium, the lender pays any closing costs that are incurred on the transaction.

Lenders may include the closing costs into the new mortgage amount when offering streamline refinances. This can only be done if there is sufficient equity in the property, as determined by an appraisal. The new loan amount can't exceed the original loan amount when streamline refinances are done without appraisals. Investment properties may only be refinanced without an appraisal (properties in which the borrower does not reside in as her or his principal residence).

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Although all information has been written in good faith and reviewed, please email us at [email protected] to report any inaccuracies.