March 14, 2014
If you want to refinance your existing FHA home loan with an FHA Streamline Refinance loan, you likely want to know what the maximum loan amount would be for the transaction. Borrowers who apply for Streamline Refinance loans are often able to do so with no credit check or appraisal (depending on the lender) and there’s no cash back to the borrower for this type of refinance loan.
The maximum FHA loan for Streamline Refinance transactions may depend on whether you have a lender-required appraisal or not. According to HUD 4155.1, the maximum FHA mortgage loan for Streamlines without an appraisal are as follows:
“The maximum insurable mortgage for streamline refinances without an appraisal cannot exceed the outstanding principal balance
• minus the applicable refund of the UFMIP,
• plus the new UFMIP that will be charged on the refinance.”
FHA loan rules state that the outstanding principal balance of the loan:
- may include interest charged by the servicing lender when the payoff is not received on the first day of the month, but
- may not include delinquent interest, late charges or escrow shortages.
- The mortgage calculation process described in HUD 4155.1 3.C.2.c applies only to owner-occupied properties. Non-owner occupant properties, even if originally acquired as principal residences by the current borrowers, may only be refinanced for the outstanding principal balance.
When it comes to FHA Streamline Refinance loans with an appraisal (but no credit check), HUD 4155.1 says the following:
“The maximum insurable mortgage amount for a streamline refinance with an appraisal is the lesser of
• the existing principal balance
− minus the applicable refund of upfront mortgage insurance premium (UFMIP)
− plus closing costs, prepaid items to establish the escrow account, and the new UFMIP that will be charged on the refinance transaction, or
• 97.75% of the appraised value of the property plus the new UFMIP that will be charged on the refinance.”
For these transactions the outstanding principal balance:
− may include interest charged by the servicing lender when the payoff is not received on the first day of the month, but
− may not include delinquent interest, late charges or escrow shortages.”
For more information on these rules, speak to your loan officer about your specific needs.
Do you have questions about FHA home loans? Ask us in the comments section. You can apply or get pre-approved for an FHA loan at FHA.com, a private company and not a government website.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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