FHA Loan Articles
News, updates, and explanations to keep you informed.
New FHA Refinancing Rules
FHA Refinancing regulations have been modified to clarify the aspects of some FHA refinance rules and to tighten those rules in other areas. Among the changes are modifications to the Streamline Refinance program-the non-credit qualifying (in most cases) refinancing loan offered by the FHA.
Some borrowers apply for an FHA insured mortgage fully intending to refinance it later on using an FHA Streamline Refinancing loan--the availability of these refinancing options are why some borrowers may be tempted to choose an adjustable rate mortgage, planning to refinance and get a better interest rate later on.
But for those who make such plans, the new rules change how soon a borrower can take advantage of an FHA streamline refinancing loan. Effective immediately, there is a minimum amount of time the FHA borrower must own the property and make FHA mortgage payments before they are allowed to apply for refinancing.
Borrowers are now required to make at least six payments on the mortgage being refinanced and wait until "at least six full months must have passed since the first payment due date of the refinanced mortgage".
The new rules also include the requirement that "at least 210 days have passed from the closing date of the mortgage being refinanced." As an example, the FHA rules say, "...if the FHA case number on the mortgage being refinanced was closed on or before December 1, and if mortgagor's first payment on that mortgage was due on January 1, the mortgagee may request assignment of an FHA case number for the refinancing mortgage no earlier than July 1."
There are other changes to streamline loans. Borrowers must now be "current on the mortgage being refinanced for the month due prior to the month in which they close the refinancing and for the month in which they close" according to the new FHA requirements.
Another quote from an FHA policy update says, "FHA no longer requires mortgagees to certify employment and income on streamline refinance transactions." That changes the way lenders process streamline refinancing loans and doesn't necessarily affect the borrower directly, but the FHA's new rules alters the process for lenders on several levels.
FHA NEWS and RELATED ARTICLES
One type of question that sometimes arises about FHA loans-- Is there a no-credit-check version of an FHA mortgage loan? What is the criteria required for FHA loans that do not require a credit check and/or appraisal?
One not-so-common question about FHA loans still comes up often enough to discuss in detail. Some FHA loan applicants want to know if they can purchase a residence from another family member using an FHA insured mortgage.
Except for obligations specifically excluded by state law, the debts of the non-purchasing spouse must be included in the borrower’s qualifying ratios if certain conditions are met.
Some FHA borrowers have questions about applying for an FHA loan after experiencing a short sale on a previous home. The FHA loan rules found in HUD 4155.1 have the answers for borrowers applying for an FHA mortgage after a short sale.
The FHA and HUD issued new rules for mortgage insurance designed to add fiscal security to the loan program, and when those rule changed the new guidelines were published in Mortgagee Letter 2013-04.