FHA Streamline Refinance WITHOUT an Appraisal

The salient features of FHA streamline refinance without appraisal are as follows:

Loan Amount: The maximum loan amount in case of FHA streamline refinance without an appraisal is the lower amount between the original loan amount and the existing debt.

Original Loan Amount: Original loan amount is the principal mortgage amount which should also include any upfront insurance premium as well as upfront mortgage premium on the refinance.

Existing Debt: Existing debt is the sum of the FHA insured first lien, closing cost, discount points and expenses paid to establish escrow account minus any upfront mortgage insurance premium refunded. The existing first lien includes the interest charged by the servicing lender but does not include delinquent interest, late charges or escrow shortage. This calculation is applied only to owner occupied properties.

Refinance for secondary residence or investors can only be made without an appraisal. This refinance should be done in the entity name if the previously insured mortgage is in the entities name.

Term: The period of the streamline refinance without appraisal is twelve years more than the unexpired terms of the existing mortgage, which cannot exceed 30 years.

Cash Back: cash back at the time of closing is limited to $500.

Withdrawn Condominium Approvals: Only streamline refinance without an appraisal can be insured by FHA if the project approval of a condominium has been withdrawn.

Appraisal, Termite Inspection, and Credit Report Fees: There is no need of termite inspection or credit report for FHA streamline refinance without appraisal. But, the borrower has to pay the required cost from out of pocket not financed, if banking regulations, law or secondary market investors instruct lenders to get these services on a streamline refinance without a FHA appraisal.

Cash to close: There is no need to show the evidence of cash for loan closing.

Underwriting: No mortgage credit underwriting is required for refinance without appraisal.

Reduction of mortgage term: In case of streamline refinance without appraisal, the mortgage term may be reduced as long as the new monthly mortgage payment does exceed the existing amount of monthly mortgage payment by $50.

Delinquent Mortgages: The without appraisal option cannot be offered to mortgages which are delinquent.

Geographic Areas: Lenders can seek refinance proposals from across the country without any geographic restrictions. However, to seek proposals with geographic restrictions, lenders must be approved for DE by at least one HOC.

FHA streamline refinance is the only refinance mortgage option that can be used for organizations without profit. However, these non-profit organizations must on the list in the FHA connection as approved by FHA to be borrowers on FHA loans.

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