FHA Streamline update

The FHA Streamline program is still a great option for home owners already in an FHA loan. You don’t have to be in an FHA loan for 1 yr, the guideline states that as long as FHA has bought your loan you are eligible for the streamline program. One change that has occurred is that all banks are now requesting a minimum FICO to be eligible for a streamline. That minimum score is 620. Most banks still do have “hits/bumps” for scores under 660. They are usually tiered from 620-660. FHA Jumbos are also eligible for streamlines. The one thing you need to check for is your monthly savings. The streamline program is pretty simple. The banks do not verify income, assets, or an appraisal. They do check for on-time payments and the 620 minimum. On loans under 200k, you need a substantial decrease on your rate to see a substantial savings. You are probably looking at a savings of 1% point. On loans over 200k, the decrease in rate does not have to be as much, to see a substantial savings. On loans of over 200k, the rate drop can be from .5 to .75.

A few banks will allow one late payment in the last year, but that is something that needs to be reviewed and approved by the underwriter. As a borrower you need to be aware of something called, a rolling late. What that is, when you are late on your mortgage payment, it will show up as a 1 x 30-day late on your credit report. If the next month you send in your payment, it will be applied to the previous month. If you do not catch up from the time you missed the original payment, your credit report will show multiple lates, even though you have only been late 1 month. 

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