FHA & VA Streamline Refinance

FHA Streamline Refinance

The FHA Streamline Refinance is available to borrowers who already have an FHA loan. It's designed to reduce the interest rate and/or monthly payment with minimal documentation and, in most cases, no new appraisal. The "streamline" name refers to the reduced paperwork — not necessarily a fast closing, though they often are faster than standard refinances.

FHA Streamline requirements

• Must have an existing FHA loan
• Must be current on your mortgage (no 30-day lates in the past 12 months)
• Must have made at least 6 payments on the current FHA loan
• The refinance must produce a "net tangible benefit" — typically a reduction in the combined rate and MIP of at least 0.5%
• No cash out is permitted (rate-and-term only)

Credit and income verification

For a non-credit-qualifying streamline, no income verification or credit check is required. For a credit-qualifying streamline (required when adding or removing a borrower, or when the lender requires it), standard FHA credit guidelines apply.

MIP on FHA Streamlines

A new upfront MIP is charged on FHA Streamlines, but you receive a partial refund of the MIP from your original loan if it was less than 3 years ago. The annual MIP rate on the new loan follows current FHA guidelines.

VA Interest Rate Reduction Refinance Loan (IRRRL)

The VA IRRRL — commonly called the VA Streamline — allows existing VA loan holders to refinance into a lower rate with minimal documentation. Like the FHA Streamline, it typically requires no appraisal and no income verification.

VA IRRRL requirements

• Must have an existing VA loan on the property
• Must certify that you previously occupied the property as your primary residence
• The new rate must be lower than the existing rate (unless refinancing from an ARM to a fixed rate)
• Must be current on your mortgage
• No cash out permitted

VA funding fee on IRRRLs

The VA funding fee for an IRRRL is 0.5% of the loan amount — significantly lower than the purchase funding fee. Veterans with a service-connected disability rating are exempt. The fee can be rolled into the loan balance.