With the recent drop in rates, more people are starting to ask us about refinancing options within the FHA program. A couple of the recent questions that we received about the FHA streamline program:
Earlier this year, I got into the FHA program with an FHA Secure loan. Can I do an FHA streamline refinance?
No. FHA Secure loans are not eligible for the streamline program.
I am currently in an FHA loan that is adjustable. My current interest rate is 4.5% but I am afraid that it will go up and want to get into a fixed rate. Can I do an FHA streamline refinance?
Yes. The guidelines for an “ARM to FIXED” (that is mortgage slang for refinancing from an adjustable rate into a fixed rate) are that the new fixed rate cannot be greater than 2% above your current arm rate.
Other General FHA Streamline Rules:
FHA ARM to FHA ARM
You must have a payment reduction *and* the maximum interest rate of the new loan cannot exceed the possible maximum interest rate of the new loan.
FHA Fixed to FHA ARM
The start rate of the new FHA ARM must be 2% below the current fixed rate. Since FHA fixed rates are almost the same as FHA ARM rates, this isn’t something that really applies in today’s world.
These are just a few of the simple rules about the FHA streamline program, be sure to stay tuned for more information to come out as people keep inquiring whether or not the FHA streamline program makes sense in their current situation.