FHA Streamline Refinance

If you currently have a FHA Loan you can do a FHA Streamline Refinance to either lower your monthly payment amount, convert from a Adjustable Rate to a Fixed Rate Mortgage or to reduce the term of the loan.

CALL 602 993-0000 or email sunnations@cox.net to see if you qualify

Program Parameters in Arizona::

Available Programs:  15 and 30 year Fixed Rate. 3/1 and 5/1 Adjustable Rate Loans

Adjustable Rate to Fixed Rate Parameters-From a 1 year Adjustable Rae to a Fixed Rate;the interest rate of the new loan cannot be more than 2% greater than the existing rate.  From a 3/1 or 5/1 ARM to a Fixed rate the monthly mortgage payment cannot increase by more than 20% or it must be credit qualifying. 

Appraisal Requirements- The maximum mortgage amount without an appraisal cannot exceed;  The current loan payoff minus the refund of the Up Front Mortgage Insurance Premium (UFMIP) PLUS the new UFMIP.  Note;  The payoff may include interest charged by the lender when the payoff is not received by the 1st of the month, but may not include late charges, delinquent interest or escrow shortages.

The maximum term is the lesser of 30 years or remaining term plus 12 years.

The maximum mortgage with an appraisal is the LOWER of;

#1 The loan payoff minus the UFMIP PLUS the new UFMIP, Closing costs and prepaids

#2 97.75% of the appraised value of the property plus the new UFMIP.

Note;  The payoff may include interest charged by the lender when the payoff is not received by the 1st of the month, but may not include late charges, delinquent interest or escrow shortages 

Adjustable Rate Terms-

     Index-1 year treasury

     Margin - 3/1 and 5/1 ARMS - 2.25%

     Interest Rate Caps-1% initial Adjustmant Cap.then 1% adjustment cap with a 5% lifetime cap

Assumability-not allowed

Borrowers (Adding or deleting)-

The current deed or title must be used to verify all the current borrowers are listed as owners.

Adding a borrower can be done without credit qualifying

Deleting a borrower must be processed as a credit qualifying loan, unless one of the following exist:
 
The loan must have been legally assumed more than 6 months ago AND the remaining borrower must document that they have made the mortgage payments solely during that time. A borrower who assumed or took title, subject to an FHA insured mortgage, without the benefit of a credit review, must have owned the property for at least 6 months before becoming eligible for a streamline refinance. Verification of mortgage payments and seasoning can be shown through copies of the most recent 6 months cancelled checks
AND a copy of the Quit Claim Deed showing the transfer of ownership occurred at least 6 months prior.

OR

The property was transferred as a result of a divorce decree AND the assumption or quit claim of interest occurred more than 6 months ago AND the remaining owner occupant can demonstrate that they have made the mortgage payments during this time. For verification the following documentation is required:
• Copy of the most recent 6 months consecutive cancelled checks (Checks drawn on joint accounts involving the deleted borrower are NOT acceptable)
• Copy of divorce decree and property settlement agreement
• Copy of quit claim deed showing the transfer of ownership at least 6 months prior

Cash Reserves-None Required

Cash Out-Cash back to the borrower is not allowed with the exception of minor closing adjustments with the borrower not receiving more than $500.

Condos-HUD approved Condos, Verfication of 51% owner occupancy required, if an appraisal is completed. If there is no appraisal, condo verification is not required.

Credit Score-Take the middle score of your three scores and it must be greater than 640

Credit Qualifying Documentation-will be required if your payment increases by 20% or more OR you are adding / deleting a co-borrower such as in a divorce.  (see adding/deleting co-borrower)

• Verbal Verification of employment
• Credit report with Credit Scores
• 4506T
• Asset Verification required when paying for costs not included in new mortgage
• Appraisal, if needed
• One months of paycheck stubs and last two years W2's (income documentation)
• Loan must be current and no mortgage lates in the last 12 months
• Copy of Note, final HUD1 and current mortgage statement
• The debts of the non purchasing spouse must be included since we are a community property state
• Hazard Insurance
• Copy of Driver's License and Social Security Card to comply with the Patriot Act

Discount Points-Can be charged but cannot be included in the new mortgage.  Assets need to be verified for the amount.

Documentation-You will need to do a credit qualifying documentation if your payment increased by more than 20% or you are adding / deleting a co-borrower (such as in a divorce) see credit qualifying and non credit qualifying documentation.

Eligible Borrowers-U.S. Citizens, Permanent and non permanent resident aliens, existing non-occupying co-borrowers.  A maximum of 4 borrowers per application is allowed.

Eligible Property Types-Single Family Residences,  1-4 units, HUD approved Condos, PUD's

Foreclosures-Within the last three years are not allowed unless extenuating circumstances can be shown.

Ineligible Property Types-Condos without HUD approval, Manufactured Homes, Mobile homes, Condotels, mixed use, leased land, log homes.

LTV-Loan to value cannot exceed 97.75%.  The 97.75% LTV does not apply to FHA Streamline Refinance without appraisals.  The CLTV cannot exceed 100%.

Loan Term Changes-If refinancing to a shorter term than it must be done as rate/term refinance. 

Maximum Loan Amount-The maximum loan amount varies by County and 1,2,3 or 4 family property.

Minimum Loan Amount-$75,000 

Mortgage Insurance-All Loans require mortgage insurance and are quoted up front / monthly rate

Net Tangible Benefit-Must show that there is a Net Tangible Benefit from the refinance such as decrease in monthly payment, Adjustable rate to fixed rate or decrease in term

Non Credit Qualifying Documentation-

• Verbal verification of employment
• Credit Report with Credit Scores
• Income does not need to shown on the application
• Copy of Driver's License and social security card to comply with Patirot Act
• Copy of Note, final HUD1 and current mortgage statement
• Hazard Insurance
• Loan must be current and no mortgage lates in last twelve months
• Asset verification for costs that are not included in new mortgage
• Appraisal, if needed

Non-Occupying Co-borrowers-Non occupying co-borrowers can remain on the loan.  Adding a non-occupying co-borrower is NOT allowed. For 2-4 unit properties, the maximum LTV is 75%, if there is a non-occupying co-borrower on the loan.

Occupancy-Owner Occupied Properties Only

Qualifying-qualify at the note rate.  Installment debt can be paid off to qualify.  Do not count installment debt with less than 10 months remaining if the monthly payment is less than $250.

Recently De Listed Properties-must have been removed from MLS at least 90 days prior to application date.  Evidence of listing cancellation is required.

Ratios-for credit qualifying; 31/43.  No ratios required for non credit qualifying. 

Short Sale, short pay offs and Pre-foreclosures- these are all considered foreclosures.

Subordinate Financing-NO new subordinate financing may be obtained.  Existing subordinate financing may remain in place regardless of total indebtness and must be subordinated.

Termite Inspection- None required unless appraiser notes a problem

Thin Credit guidelines-Borrower must provide alternative credit ratings to meet the required 3 tradelines.  It must be on a seperate credit supplement.   Must have one rating from GROUP 1 and the rest can come from GROUP2.

GROUP 1:  Rental verification from property manager or cancelled checks if private party landlord. Utility company reference if not included in the rent payment-gas, electricity, water, land line telephone, cable.  GROUP 2: Insurance payments that are not payroll deducted such as medical, auto, life or renter's insurance.  Payment to company child care providers.  Payments to furniture stores, specialty stores, department stores, appliance stores, rent to own stores, payment of medical bills not covered by insurance.  Internet/ cell phone services.  Auto loans or leases through private party that can be documented through cancelled checks.  Documented history of savings with an increasing balance-not payroll deducted, at leaset quarterly deposits and no nsf checks.

Title Seasoning-Borrower must have made at least 6 payments

Tradeline Requirements-All borrowers must have a valid FICO score with 3 sufficient Tradelines.  A sufficient tradeline is 3 active lines with a 12 month history and activity in the last twelve months.  Insufficient tradelines are Authorized User accounts, deferrred student loans, co-signed accounts, derog or disputed credit items,  In the event the borrower does not meet the 3 tradelines then "Thin Credit" guidelines will apply.

Bankruptcy-Chapter 7; must be discharged at least 2 years and the borrower has reestablished their credit.  Chapter 13; One year payment period must have elapsed, payments have been on time and the court approves the refinance.