If you currently have an FHA home loan, you have certain benefits under the FHA streamline refinance program which are not available to other conventional loan borrowers.

FHA can reduce the loan documentation that is normally required to qualify by using an FHA streamline refinance, which means there are no tax returns, W-2 forms, or pay stubs needed, and there are no bank statements needed to verify assets or cash reserves. A credit report is not an FHA requirement either but, the lender may require one to determine the the interest rate. The lender will also require verification to show that your current FHA home loan is not delinquent.

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Here are 5 guidelines to fit into the FHA streamline refinance program:

1. The mortgage to be refinanced must be an FHA home loan
2. The property being refinanced must be your primary residence
3. The current mortgage being refinanced cannot be delinquent
4. The streamline refinance allows a maximum of $500 cash out
5. Refinancing must result in reduced principal and interest payments

Another benefit of the FHA streamline refinance program is that you may not even need a new appraisal, which can remove a potential problem in a housing market with declining values.

An FHA streamline refinance without a new appraisal has a maximum loan amount determined by using the lesser of the following two calculations:

1. The original principal balance of the existing FHA home loan, plus the new up front mortgage insurance premium, which is currently 1.5% on a streamline refinance.

2. The existing FHA home loan, plus closing costs, prepaid taxes, insurance, interest, and the new up front mortgage insurance premium. Subtract refund of the original insurance premium.

An FHA streamline refinance with a new appraisal has a maximum loan amount determined by the lesser of the following two calculations:

1. The current appraised value multiplied by the maximum loan to value percentage, which usually ranges from 97% to 97.75% depending on the state and the amount of the loan.

2. The existing FHA home loan, plus the closing costs, prepaid property taxes, hazard insurance, up to 30 days of interest, and subtract the refund of the original mortgage insurance premium.

If you have a second mortgage on your home, the lien holder must agree to subordinate their loan regardless of the total loan to value. FHA will allow the combined amounts of the first and second mortgages to exceed the normal loan to value and the maximum mortgage limit for the area.