***EFFECTIVE 11/17/2009, HUD REVISIONS TO FHA STREAMLINE REFINANCE PROGRAM GO INTO EFFECT!***

If you are a homeowner who currently has a FHA loan, PLEASE continue reading!

The following changes are going into effect November 17^th, 2009 for the ever popular, FHA Streamline Refinance program. On September 18, 2009 HUD released an update to its current FHA Refinance guidelines. The new plan will make it more difficult to refinance under this program!

Here are some of the changes that will go into effect:

· Must ensure that the FHA borrower(s) are employed and have income

· Borrower(s) must provide assets documentation

· A full appraisal is required if closing costs are going to be rolled into the loan

· The new MAXIMUM loan amount is calculated as follows:

    Outstanding principal balance (including 30 days of interest from the first of the month) MINUS the UPMIP refund PLUS the new UFMIP = MAXIMUM new loan amount

· Current loan must have a minimum of six months seasoning

· Current loans with 6-12 months seasoning CANNOT have any 30 day late payments

· Current loans with 12 months seasoning or greater allow for ONE 30 day late in the last twelve months

· Refinance MUST reduce current PITI by 5%

· If the term of the new loan is reduced from the current term, the loan is considered a rate/term refinance

· Investment properties/second homes are no longer eligible for this program

· Mortgage Brokers are now required to document in writing that the borrower(s) are employed and collecting income

· Payoff statement of current mortgage CANNOT include delinquent interest, late charges, or escrow shortages

· The maximum CLTV is 125% of the new value or the original value if the loan is processed WITHOUT an appraisal.

Currently the FHA Streamline allows a borrower to refinance without having to verify employment or assets and there is no need for an appraisal. The only requirements are a current payoff statement and mortgage rating showing the loan is current.

For many homeowners who would like to decrease their current rate on their FHA mortgage, the Streamline Refinance is an excellent option. Unfortunately, once the new guidelines go into effect, there will be many homeowners unable to take advantage of today’s low rates.

The process is completely automated and all documentation/correspondence is done via email/fax/phone. If you’ve been on the fence about refinancing your FHA mortgage it would be advisable to delay no longer! As more people learn of this program, lenders will be inundated with new FHA Streamline applications so the sooner the process is started the more quickly we can get the loan closed!