Articles Tagged With: MIP (Mortgage Insurance Premiums)

August 15, 2011

FHA Streamline Refinance Rules for “Net Tangible Benefits”

By Joe Wallace

The FHA changed the rules on Streamline Refinancing Loans for all case numbers assigned on or after April 18, 2011. The new regulations now include a requirement that the lender must “determine that there is a Net Tangible Benefit (NTB) to the borrower as a result of the streamline refinance transaction”. Those tangible benefits include specific requirements based on the type of refinancing loan. For example, a fixed-rate loan that is refinanced to another fixed rate mortgage must have a five percent minimum reduction in the principal, interest and mortgage insurance payment, also described as PI & MIP. For FHA Streamline Loans which refinance fixed-rate mortgages to a One Year Adjustable Rate Mortgage, the requirements include a minimum two percent reduction in interest. Fixed rate FHA loans to Hybrid ARMs | more...