The FHA Streamline refinance was originally created by HUD to “make it easy” for people who currently had FHA loans to be able to take advantage of lower interest rates when they were available without having to completely re-qualify for a new loan.
Recently, many lenders now require credit scores of 620 if you want to do an FHA streamline refinance — many, but not all.
Here is an example of an email lenders get when a particular lender changes their credit policy:
FHA & VA Non-Credit Qualifying Streamline Refinance Transactions Credit Report Requirement
Effective for any loan that does not have a Conditional or Final Approval on or after June, 18, 2009
<XYZ Mortgage Lender> requires a credit report for all non-credit qualifying FHA streamline refinance transactions as well as all VA IRRRL transactions
The credit report must reflect the borrower(s) credit score and must have a mortgage rating for the subject property that reflects no more than 1 X 30 in the previous 12 months. A single in-file credit report, from one repository, with all credit reported, will be acceptable provided it contains a complete credit history for the borrower(s) as well as the required mortgage history information; if not then a tri-merged credit report will be required. If you have a 495 prefix then you must have a 640 and reflects no more than 1X30.
In addition to the credit report provided by the broker or correspondent a separate mortgage rating will be pulled by our Quality Control Department to validate the mortgage history. <XYZ Mortgage Corporation> will obtain a single in-file report from CREDCO using the repository that reported the mortgage history on the original broker/correspondent credit report
Remember, when shopping for an Arizona FHA streamline refinance, right now, the rules are different from one lender to the next — so if you don’t get the answer you want… keep looking!