Recently it was announced that changes were coming to the FHA streamline program — and the changes that were announced won’t make it any easier to get an FHA streamline done.
According to the official announcement from HUD, the FHA streamline qualifying rules will change effective November 17, 2009.
Prior to the announcement, the FHA streamline refinance was popular with FHA borrowers because it was a “no income, no asset, no appraisal” refinance option that allowed them to take advantage of lower interest rates without having to completely re-qualify for a new loan. Recently, many lenders had started requiring a minimum credit score (580, 620, whatever) but prior to the recent announcements, there wasn’t a credit score requirement.
Times have changed and now the FHA streamline program has changed it’s guidelines – to be much stricter.
The new FHA streamline guidelines include things like you have to provide proof of employment and income as well as any cash that will be required at closing.
Oh, and you can’t finance your closing costs into the loan without a complete home appraisal now either. For anyone living in Arizona who has an FHA loan, this will be a big deal — because many times your home is worth less than what you currently owe on your mortgage.
Maybe we should call it just a regular old FHA refinance… and drop the word “streamline”.
The announcer just stood up and said something to the effect of “Ladies and gentlemen, the FHA streamline program has just left the building.”
Or – at least will leave the building come November 17th.