On Tuesday, the White House announced some pending changes to the way FHA streamline refinances are handled. Note that these changes are announced. While described as “effective immediately,” FHA will implement these changes on June 11, 2012.
Frequent readers of The Mortgage Blog will remember a post from January 2012 describing the difficulty homeowners with FHA loans face when trying to participate in the streamline refinance program. The difficulty stems from the dramatic increases to FHA mortgage insurance since the homeowners original purchase. For the full details, see this link.
Well, no more! The White House introduced a game-changer with the new guidelines for FHA streamline refinance loans. The modified guidelines pertain to homeowners who got their current FHA loan prior to June 1, 2009.
The changes include reducing the up front mortgage insurance from its current 1% of the loan amount to 0.01% of the loan amount. The monthly mortgage insurance reduces from its current 1.15% of the loan amount on an annual basis to 0.55% of the loan amount on an annual basis.
What does this mean?
If you have an FHA loan and didn’t qualify for the streamline refinance program, you may now qualify and can refinance into a lower interest rate. This is fantastic news for millions of homeowners who didn’t qualify for the streamline refinance due to the dramatic increases to the mortgage insurance on FHA loans.
As long as you used an FHA loan to buy your home prior to June 1, 2009, have been making your payments, and still live in the home as your primary residence, you will probably now qualify for an FHA streamline refinance. If the property is in the state of Georgia, I can help you get started with the process!
