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FHA Streamline

Here you will find the basic information you need to know how to refinance from a standard FHA loan to an FHA Streamline, what both their pros and cons are, and what expenses you can expect from such a refinance.

For other mortgages that require little to no down payment, click here.

FHA Streamline Requirements

  • FHA Exclusive: Your existing mortgage must be FHA-insured.
  • Clean History: Your payment history should show that you've made no late payments in the last 3 months. An exception for late payments is made if, and only if, one was made in the period no later than the last 3 months.
  • "The Waiting Period": You have to wait 210 days between closing the original FHA loan and the Streamline refi to ensure completion of 6 payments.
  • FICO Scores: Ideally, your credit score needs to be a minimum of 620. Although lower credit scoring borrowers are eligible, they will need to compensate with higher rates or mortgage insurance premiums.
  • Net Tangible Benefit: What you owe - the sum of the principal, mortgage insurance, and interest - should decrease by 5% with the streamline refinance.
  • The June 1, 2009, Threshold: If you refinanced with an FHA Streamline before June 1, 2009, 0.01% of your existing loan must be paid monthly in the form of mortgage insurance premiums (MIP). If you took the deal after this date, your MIP should amount to 1.75% of the loan.

Compare these with requirements of the FHA loan's original.

Why Should I Refinance with an FHA Streamline?

  • Assumes Original Loan: All your finances from the original FHA loan will be rolled in with the FHA Streamline. Moreover, a buyer can favor your FHA-insured home over others because its rates are also assumable.
  • Underwater Mortgage-Friendly: Not only is the original loan fully assumable, but the original purchase price of the home is what will be taken as its current value, regardless of your home's real current value.
  • No Underwater Penalties: You will not be forced to pay higher interest for having a poor credit score or debt from your original mortgage. 
  • Less Paperwork: No new appraisals are necessary and the appraisal done originally is taken as is, which means less paperwork and no appraisal fees are involved in a Streamline refinance. Moreover, where conventional loan programs would need your W-2's, tax returns, and pay stubs before approving your loan, the FHA Streamline does not.
  • Easy to Qualify: The FHA Streamline approval process goes against the grain with eliminating the need to verify your income, credit score, and recent employment history.

The Main Disadvantages

  • Closing Costs: As an out-of-pocket expense, closing costs cannot be covered by rolling finances in from the previous loan.
  • Possibly Higher MIPs: Refinancing to an FHA streamline can effectively stop you from decreasing your monthly payments due to the higher MIPs. 
  • Fixed MIPs: The MIPs remain the same for the life of the loan.

The Annual Mortgage Insurance Premiums

The annual mortgage insurance premiums for a Streamline refi made on June 1, 2009, or after, can be found in the table below. All you need are your LTV and loan period in mind to find the corresponding annual MIP attributed to your loan. If you're paying more for MIP than what you can see below, you can benefit from lower costs with a Streamline refinance.

Loan Period Loan-To-Value (LTV) Corresponding MIP
15 Years +90% 0.70%
15 Years -90% 0.45%
30 Years +95% 0.85%
30 Years -95% 0.80%


Notice that the further up the LTV goes, the higher the MIP will climb. To learn more about improving your home's loan-to-value, click here.

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