Have the FHA streamline refinance guidelines changed drastically?

Asked by Perplexed, Tampa, FL Mon Feb 8, 2010

I've contacted a few FHA-approved lenders and have learned that under this program, you now must have a full credit check (and qualify) and the property must be appraised; these steps were not necessary in 2001, when I last refinanced under this program. I suspect either they are wanting to convert me to a conventional loan, or perhaps HUD/FHA has thrown up its hands and told the lenders, "do whatever you want."

For the record, I DO have a current FHA loan, and in 11 years, have NEVER had even so much as a late payment. I currently live in the home. To my knowledge, these are the only requirements.

Can anyone explain why these lenders are now treating this program as a standard conventional loan?

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Rudy McDowell, Mortgage Broker Or Lender, Bloomfield Hills, MI
Wed Feb 10, 2010

FHA (Lender) Streamline guidelines have indeed changed since 2001. Here are the major ones:
- Min credit score is now required
- Appraisals now required
- Employment verification (not income) now required
- No mortgage lates within the last 12 months
0 votes
Daniel Casta…, Mortgage Broker Or Lender, Forest, VA
Tue Feb 9, 2010

FHA streamlines have had some changes. The default ratio is much higher on a streamline. We do not require an appraisal and we only verify that you are currently employed. We do do a credit check to ensure the score is at least a 620. If i can be of assistance, please let me know. Good Luck!
0 votes
Carl Ashton, , Boca Raton, FL
Mon Feb 8, 2010
Unfortunately its not FHA but the investors who buy the loans that require you to have 100% verifiable income a 620 credit score and property must appraise to the level of the improvements to be made (if any) and ample cash available to succeed in the improvements over the amounts appraised. Or to cash out (pay off credit cards) and pay closing costs.
0 votes
William Pola…, Mortgage Broker Or Lender, Suwanee, GA
Mon Feb 8, 2010
Unfortunately, if you look around you right now the housing industry is in the toilet compared to even just 3 years ago. 2009 was a year of changes. In May, 09, we saw the HVCC law come into play which requires the lender to order the appraisal due to the assumption that Realtors and Lenders were twisting the appraisers arm to give us a better value (home valuation code of conduct). In August we saw the MDIA rule go into affect which stated that we can't close within 7 days and can't change the closing costs by more than .125% without having to redisclose documents holding up the loan closing. In January '10, we were told that we now have to take a full application before giving a good faith estimate that is more confusing than learning a foreign language without instruction and now in Feb '10 the HVCC will apply to FHA loans. FHA also restricted the cash out refinance to 85% of the value of the home. Credit scores increased from 530 to 580 minimum and discount points are associated with scores below 700. FHA's mortgage insurance premium will increase this year as the down payment increase is contemplated. Barney Frank wants to shut down fannie may and freddie mac, the two power houses that he used to oversee. So, yeah, I'd say they've changed drastically. If you'd like me to give you some alternatives and pricing, let me know. I am licensed in FL.
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