FHA Refinance

There are many reasons to Refinance your existing Mortgage into an FHA loan.

With the recent problems surrounding the Mortgage Industry Conventional Loan Programs have been turned upside down with guideline changes making it almost impossible for many Americans to actually obtain a low rate Refinance Program.

The following are just a few reasons that an FHA Refinance might make sense for you:

signing

Low Cost

FHA-insured loans have competitive interest rates because the federal government insures the loans for lenders.

Get More Money

FHA-insured loans allow you to borrow approximately 97% of your home value.

More protection to keep your home

The FHA has been helping people since 1934. Should you encounter hard times after buying your home, the FHA has many options to keep you in your home and avoid foreclosure.

Less than perfect credit

You don’t need perfect credit to get an FHA-insured mortgage. In fact, even if you have had credit problems, such as a bankruptcy, it’s easier for you to qualify for an FHA-insured loan than a conventional loan.

Easier qualification

Because FHA insures your mortgage, lenders may be more willing to give you loan terms that make it easier for you to qualify.

FHA Streamline Refinance

The FHA Streamline Refinance is just another advantage to obtaining an FHA-insured loan. For those that already have an FHA loan they have the opportunity to refinance there existing FHA loan into another FHA loan through the Streamline Program. Borrowers that are current on there Mortgage and have not had any Mortgage payments more than 30 days late in the past 12 months may be able to take advantage of todays low interest rates without re-qualifying for their loan. Below are a few benefits of the FHA Streamline Refinance:

No Appraisal needed

In many situations there is no appraisal needed, saving you money and avoiding the potential problems with declining home values.

No Income Documentation needed

Verbal verification of your employment without income information is all that is needed from your employer.

Fast and Easy

With the streamline process you can generally close your loan in about half the time as a traditional refinance.

Low Cost

Generally the cost involved in a Streamline is significantly less than a traditional refinance.

FHA 203(k) Streamlined

The FHA 203(k) Streamlined program provides a single-close loan that enables a qualified borrower to purchase a home that may need repairs OR refinance there existing home for the purpose of remodeling. This program generates the necessary funds for renovation by financing the as-completed value, rather than the present value.

Program Highlights FHA 203(K) STREAMLINED
PROPERTY TYPE 1- to 4- UNIT
MAXIMUM LTV RATIO Purchase Maximum 96.5% LTV and refinance maximum 97.75% LTV
CREDIT SCORE Minimum 620 credit score required
OCCUPANCY Owner-occupied primary residence only
LOAN PURPOSE Purchase and rate/term refinance
ELIGIBLE MORTGAGES 30 year fixed rate mortgages
REHABILITATION PERIOD Rehabilitation must begin within thirty day’s of closing and be fully completed within a maximum of six months
SECONDARY FINANCING Allowed
BORROWER CONTRIBUTION/DOWN PAYMENT The minimum down payment requirement on purchase transactions is 3.5%; refinance may not require a down payment if the borrower has substantial equity in the home.
INTERESTED PARTY CONTRIBUTIONS Up to 6% allowed to cover closing costs, prepaides, expenses, discount points and the other financing concessions. 
AMOUNT OF REHABILITATION Minimum $5,000 rehabilitation costs and maximum $35,000 to be eligible, but the total value of the property must still fall within the FHA mortgage limit for the area; the value of the property is determined by either the value of the property before rehabilitation plus the cost of rehabilitation 110% of the appraised value of the property after rehabilitation, whichever is less; expenses eligible for inclusion in the cost of rehabilitation are materials, labor, plus expenses related to the rehabilitation such as permits, inspection fees, and lien protection fees for the title updates.
Additional restrictions apply. 
SELF-HELP Self-help arrangements in which the borrower is performing some or all of the work items are strongly discouraged unless the borrowers ability to perform the work in a competent, timely and workman like manner is self evident and easily documented. The self-help option is not allowed if any project for which permits will be required, unless the borrower is licensed contractor working in the specific field necessary for the rehabilitation.
Additional restrictions apply. 
ELIGIBLE IMPROVEMENTS The streamline FHA 203(k) program is intended to facilitate uncomplicated rehabilitation and /or improvements to a home for which plans, consultants, engineers and/or architects are not required; eligible improvements are limited and can not include any major rehabilitation or remodeling, new construction such as a room addition, repairs to structure damage or site amenity improvements.Examples of eligible improvements are:
  • Repair/replacement of roofs, gutters, and downspouts; plumbing and electrical systems; and flooring.
  • Repair/replacement/upgrade of existing heating, ventilation and air conditioning systems.
  • Minor remodeling that does not involve structural repairs, such as kitchens.
  • Exterior and interior painting.
  • Weatheriztion, including storm windows and doors, insulation, weather stripping, etc.
  • Purchase and installation of appliances, including free-standing ranges, refrigerators, washers, dryers, dishwashers, and microwaves.
  • Improvements for accessibility for persons with disabilities.
  • Lead-based paint stabilization or abatement of lead based paint hazards.
  • Repair/replacement/additions of exterior decks, patios, porches.
  • Basement finishing and remodeling that does not involve structural repairs.
  • Basement waterproofing
  • Replacement of windows and doors and exterior wall re-siding. Additional restrictions apply