Loan Information
Changes Coming To FHA Streamline Program
October 25, 2009 by Jeff Thomas · Leave a Comment
Changes to FHA streamline program are not for the ease of the consumer. And the changes are not for the better. In fact, most FHA loan holders will not like the changes.
The US Dept of HUD recently announced that it will be making new revisions to FHA streamline refinance guidelines.
Effective November 17, 2009, taking advantage of today’s historic low interest rates will be more difficult for consumers who currently have an FHA loan to refinance and wish to use the FHA streamline refinance program.
Can you believe the changes are not making it easier to refinance an FHA loan? Below are some of the key changes as complied by Jeff Thomas and Lending-Solutions.net:
Seasoning (length of time loan is open):
You now must have made 6 payments on time to qualify.
Payment history:
If you have had the loan for less than 12 months, all payments must be on time.
If you have had the loan for more than 12 months, only one payment could be 30 days late but not in the last 3 months.
Net tangible benefit for the borrower:
As determined by the lender, not the borrower. The lender must determine that there is a benefit to the consumer for completing the refinance
Maximum Combined Loan-to-Value (How much equity is left in your home):
If a 2nd mortgage is on the property, a maximum combined loan-to-value of 125% is allowed. (The maximum allowed over the value of the home is 25%).
New Maximum Mortgage Amount for Streamline Refinances WITHOUT an Appraisal:
You can no longer roll in all of the closing costs on an FHA mortgage refinance loan.
Discounts Points can no longer be rolled into the loan; with or without an appraisal. If charged, this fee must be paid out of pocket.
Money needed for closing:
If money is needed to close the refinance transaction, these funds must be verified prior to closing. (Hint – finds must be in your account at least 120 days prior to closing.
Income and employment:
Certification that borrower is employed and has income.
The lender must verbally verify that you are employed at the job you stated on the application.
Loan application:
Elimination of abbreviated Uniform Residential Loan Application (URLA).
The traditional full loan application is now required to be completed and signed.
