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
When applying for an FHA home loan, some lenders may ask for tax paperwork as part of the application process. Some borrowers may wonder if this is legal, or an acceptable practice for home loans in general.
There are many questions about the official FHA loan rules for occupancy for single-family home loans. According to FHA rules, a borrower must occupy the home purchased with a single-family FHA loan as a personal residence as a condition of loan approval.
After the housing market crisis of the previous decade, many mortgage borrowers found themselves having trouble making their monthly payments. In some cases, borrowers just walked away from the mortgage completely and allowed the home to be foreclosed upo
The FHA has announced it would accept electronic signatures (also known as e-signatures) on several FHA home loan documents. The new policies are found in detail described in FHA Mortgagee Letter 14-03.
Some of your FHA loan closing costs may be financed, and some may--after being negotiated between buyer and seller--be paid by the seller within the boundaries of the FHA loan programís rules. The borrower can also pay some closing costs out of pocket.