FHA Streamline Refinance

FHA Streamline Refinance

We hear it all the time!

What's the minimum credit score for an FHA loan? The answer is it depends on who you ask. All the major banks Wells Fargo, Bank of America, Chase, Citigroup, etc. have minimum FICO score requirements.

On January 20, 2010 FHA announced a policy change to address risk and strengthen finances. FHA changed the minimum FICO scores for new borrowers.

• New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
• This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
• This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.

The 2016 FHA streamline refinance program does not have a minimum FICO score requirement. Effective on or after April 18, 2011, FHA no longer requires employment and income verification on streamline refinance loans.

• No minimum credit score to qualify
• No employment verification
• No credit report required
  
• No appraisal required

A borrower is eligible for a FHA streamline refinance if for the last 12 months mortgage payments were made on time and there current mortgage is an FHA mortgage. To qualify for a streamline refinance there must be a net tangible benefit to the homeowner.

• the borrower must have made at least six payments on the FHA-insured loan
  
• mortgage being refinanced at least six full months must have passed since the first payment due date of the refinanced mortgage
  
• at least 210 days must have passed from the closing date of the mortgage being refinanced

FHA streamline refinance is designed to lower the monthly principal and interest payments on a current FHA-insured mortgage. The new loan must involve no cash back to the borrower, except for minor adjustments at closing, not to exceed $500.

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