FHA Streamline Loan Seasoning Periods
September 16, 2013
When it comes to FHA streamline refinancing loans, one common question involves the required wait time between the date when the borrower begins making mortgage loan payments on the home and the day the borrower becomes eligible to apply for FHA Streamline Refinancing on that mortgage.
One version of this common question goes like this:
“How long until I can refinance my FHA loan with a Streamline? Is there a cutoff date for when the original FHA mortgage was started? I have been getting letters saying I am ‘prequalified’ for a streamline, but when I applied I was told I wasn’t in the house or the loan long enough.”
FHA updated its policies on this issue back in 2011 in Mortgagee Letter 2011-11. That mortgagee letter contained a policy update on a variety of requirements for FHA refinance loan transactions. It specifically mentions issues like the “seasoning period” for FHA loans before a borrower can apply for FHA refinancing.
When applying for FHA Streamline Refinance Loans, according to Mortgagee Letter 2011-11:
- The mortgagor must have made at least six payments on the FHA- insured mortgage that is being refinanced, and
- At least six full months must have passed since the first payment due date of the refinanced mortgage, and
- At least 210 days have passed from the closing date of the mortgage being refinanced.
To further explain how these rules work, the FHA official site lists an example, stating that 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.”
While this is the stated minimum FHA loan policy, borrowers should know that an individual lender may require a longer seasoning period as long as the requirement is applied in accordance with Fair Housing Act laws. For more information, speak to a loan officer or contact the FHA directly to see how these rules apply to you.
One version of this common question goes like this:
“How long until I can refinance my FHA loan with a Streamline? Is there a cutoff date for when the original FHA mortgage was started? I have been getting letters saying I am ‘prequalified’ for a streamline, but when I applied I was told I wasn’t in the house or the loan long enough.”
FHA updated its policies on this issue back in 2011 in Mortgagee Letter 2011-11. That mortgagee letter contained a policy update on a variety of requirements for FHA refinance loan transactions. It specifically mentions issues like the “seasoning period” for FHA loans before a borrower can apply for FHA refinancing.
When applying for FHA Streamline Refinance Loans, according to Mortgagee Letter 2011-11:
- The mortgagor must have made at least six payments on the FHA- insured mortgage that is being refinanced, and
- At least six full months must have passed since the first payment due date of the refinanced mortgage, and
- At least 210 days have passed from the closing date of the mortgage being refinanced.
To further explain how these rules work, the FHA official site lists an example, stating that 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.”
While this is the stated minimum FHA loan policy, borrowers should know that an individual lender may require a longer seasoning period as long as the requirement is applied in accordance with Fair Housing Act laws. For more information, speak to a loan officer or contact the FHA directly to see how these rules apply to you.
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