II.A.8.d. Refinances (09/14/15)

© HUD Single Family Housing Policy Handbook 4000.1

Included in this section are:

i. Overview
ii. General Eligibility
iii. Temporary Interest Rate Buydowns
iv. Upfront Mortgage Insurance Premium Refunds
v. Cash-Out Refinances
vi. No Cash-Out Refinances

i. Overview

(A) DefinitionA Refinance Transaction is used to pay off the existing debt or to withdraw equity from the Property with the proceeds of a new Mortgage for a Borrower with legal title to the subject Property.

(B) Types of Refinances

(1) Cash-OutA Cash-Out Refinance is a refinance of any Mortgage or a withdrawal of equity where no Mortgage currently exists, in which the mortgage proceeds are not limited to specific purposes.

(2) No Cash-OutA No Cash-Out Refinance is a refinance of any Mortgage in which the mortgage proceeds are limited to the purpose of extinguishing the existing debt and costs associated with the transaction. FHA offers three types of no cash-out refinances:

(a) Rate and TermRate and Term refers to a no cash-out refinance of any Mortgage in which all proceeds are used to pay existing mortgage liens on the subject Property and costs associated with the transaction.

(b) Simple RefinanceSimple Refinance refers to a no cash-out refinance of an existing FHA-insured Mortgage in which all proceeds are used to pay the existing FHA-insured mortgage lien on the subject Property and costs associated with the transaction.

(c) Streamline RefinanceStreamline Refinance refers to the refinance of an existing FHA-insured Mortgage requiring limited Borrower credit documentation and underwriting. There are two different streamline options available.

(i) Credit QualifyingThe Mortgagee must perform a credit and capacity analysis of the Borrower, but no appraisal is required.

(ii) Non-Credit QualifyingThe Mortgagee does not need to perform credit or capacity analysis or obtain an appraisal.

(3) Refinance of Borrowers in Negative Equity Positions (also known as Short Refinance)A Borrower who is current on their non FHA-insured Mortgage may qualify for an FHA-insured refinance Mortgage provided that the Mortgagee or investor writes off at least 10 percent of the unpaid principal balance of the existing first lien Mortgage. (See Refinance of Borrowers in Negative Equity Positions Program (Short Refi)).

(4) Refinances for the Purpose of Rehabilitation or RepairA Borrower may refinance existing debts and obtain additional financing for purposes of rehabilitation and repair. Refer to 203(k) Rehabilitation Mortgage Insurance Program for guidelines for refinances under FHA’s Section 203(k) program.

(5) Refinancing of an Existing Section 235 MortgageAn existing Section 235 Mortgage may be refinanced as any no cash-out refinance.In refinancing a Section 235 Mortgage, the Mortgagee is required to repay to FHA any amount of excess subsidy. The outstanding principal balance on a Section 235 is calculated by adding back to the balance any amount of the excess subsidy paid to FHA.If FHA has a junior lien that was part of the original Section 235 financing, FHA will subordinate the junior lien to the Section 203(b) Mortgage that refinances the Section 235 Mortgage.

ii. General Eligibility

(A) FHA-Insured to FHA-Insured Refinances (FHA-to-FHA)FHA-to-FHA refinances may be used with any refinance type. The Mortgagee must obtain a Refinance Authorization Number from FHA Connection (FHAC) for all FHA-to-FHA refinances.FHA will not issue a new case number for any FHA to FHA Refinance where the existing Mortgage to be paid off has a repair or rehabilitation escrow account that the Escrow Closeout Certification has not been completed in FHAC.

(B) General Borrower EligibilityAt least one Borrower on the refinancing Mortgage must hold title to the Property being refinanced prior to case number assignment.

(C) General Property EligibilityFor a transaction involving a Manufactured Home to be considered a refinance, the Manufactured Home must have been permanently erected on a site for more than twelve months prior to case number assignment.

(D) General Mortgage Eligibility

(1) StandardFor cases endorsed on or before September 30, 2015, the Mortgagee must not approve any Mortgage that refinances or otherwise replaces a Mortgage that has been subject to eminent domain condemnation or seizure, by a state, municipality, or any other political subdivision of a state.

(2) Required DocumentationIf the Mortgage to be insured is located in an area where a state, municipality, or other political subdivision has exercised eminent domain condemnation or seizure of a Mortgage, the Mortgagee must obtain a certification from the Borrower stating the Mortgage being refinanced was not subject to eminent domain condemnation or seizure.

iii. Temporary Interest Rate Buydowns

Temporary interest rate buydowns are not permitted with refinance transactions.

iv. Upfront Mortgage Insurance Premium Refunds

If the Borrower is refinancing their current FHA-insured Mortgage to another FHA-insured Mortgage within 3 years, a refund credit is applied to reduce the amount of the Upfront Mortgage Insurance Premium (UFMIP) paid on the refinanced Mortgage, according to the refund schedule shown in the table below:

v. Cash-Out Refinances

(A) Borrower EligibilityNonprofit agencies, state and local government agencies and Instrumentalities of Government are not eligible for cash-out refinances. Income from a non-occupant co-Borrower may not be used to qualify for a cash-out refinance.

(1) Occupancy Requirements

(a) StandardCash-out refinance transactions are only permitted on owner-occupied Principal Residences.The Property securing the cash-out refinance must have been owned and occupied by the Borrower as their Principal Residence for the 12 months prior to the date of case number assignment.ExceptionIn the case of inheritance, a Borrower is not required to occupy the Property for a minimum period of time before applying for a cash-out refinance, provided the Borrower has not treated the subject Property as an Investment Property at any point since inheritance of the Property. If the Borrower rents the Property following inheritance, the Borrower is not eligible for cash-out refinance until the Borrower has occupied the Property as a Principal Residence for at least 12 months.

(b) Required DocumentationThe Mortgagee must review the Borrower’s employment documentation or obtain utility bills to evidence the Borrower has occupied the subject Property as their Principal Residence for the 12 months prior to case number assignment.

(2) Payment History Requirements

(a) StandardThe Mortgagee must document that the Borrower has made all payments for all their Mortgages within the month due for the previous 12 months or since the Borrower obtained the Mortgages, whichever is less.Additionally, the payments for all Mortgages secured by the subject Property must have been paid within the month due for the month prior to mortgage Disbursement.Properties with Mortgages must have a minimum of six months of Mortgage Payments. Properties owned free and clear may be refinanced as cash-out transactions.

(b) Required DocumentationIf the Mortgage on the subject Property is not reported in the Borrower’s credit report or is not in the name of the Borrower, the Mortgagee must obtain a verification of Mortgage, bank statements or other documentation to evidence that all payments have been made by the Borrower in the month due for the previous 12 months.

(B) Maximum Mortgage Amounts

(1) Standard

(a) Maximum Loan-to-ValueThe maximum LTV is 85 percent of the Adjusted Value.

(b) Maximum Combined Loan-to-ValueThe maximum CLTV is 85 percent of the Adjusted Value.

(c) Nationwide Mortgage LimitThe combined mortgage amount of the first Mortgage and any subordinate liens cannot exceed the Nationwide Mortgage Limit described in National Housing Act’s Statutory Limits.

(2) Required DocumentationThe Mortgagee must obtain the payoff statement for all existing Mortgages.

vi. No Cash-Out Refinances

(A) Rate and Term

(1) Borrower Eligibility

(a) Occupancy Requirements

(i) StandardRate and Term refinance transactions are only permitted on owner-occupied Principal Residences and HUD-approved Secondary Residences.

(ii) Required DocumentationThe Mortgagee must review the Borrower’s employment documentation or obtain utility bills to evidence the Borrower currently occupies the Property and determine the length of time the Borrower has occupied the subject Property as their Principal Residence.

(b) Payment History Requirements (Manually Underwritten)

(i) StandardFor all mortgages on all properties with less than six months of Mortgage Payment history, the Borrower must have made all payments within the month due.For all mortgages on all properties with greater than six months history, the Borrower must have made all Mortgage Payments within the month due for the six months prior to case number assignment and have no more than one 30-Day late payment for the previous six months for all mortgages.The Borrower must have made the payments for all Mortgages secured by the subject Property for the month prior to mortgage Disbursement.

(ii) Required DocumentationIf the Mortgage on the subject Property is not reported in the Borrower’s credit report, the Mortgagee must obtain a verification of Mortgage to evidence payment history for the previous 12 months.

(2) Maximum Mortgage Amount

(a) Maximum Loan-to-Value RatioThe maximum LTV for a Rate and Term refinance is:

• 75 percent for Principal Residences that have been owner-occupied for previous 12 months, or owner-occupied since acquisition if acquired within 12 months, at case number assignment;
• 85 percent for a Borrower who has occupied the subject Property as their Principal Residence for fewer than 12 months prior to the case number assignment date; or if owned less than 12 months, has not occupied the Property for that entire period of ownership; or
• 85 percent for all HUD-approved Secondary Residences.

(b) Calculating Maximum Mortgage Amount

(i) StandardThe maximum mortgage amount for a Rate and Term refinance is:

• the lesser of:
  • the Nationwide Mortgage Limit;
  • the maximum LTV based on the Maximum LTV Ratio from above; or
  • the sum of existing debt and costs associated with the transaction as follows:
    • existing debt includes:
      • the unpaid principal balance of the first Mortgage as of the month prior to mortgage Disbursement;
      • the unpaid principal balance of any purchase money junior Mortgage as of the month prior to mortgage Disbursement;
      • the unpaid principal balance of any junior liens over 12 months old as of the date of mortgage Disbursement. If the balance or any portion of an equity line of credit in excess of $1,000 was advanced within the past 12 months and was for purposes other than repairs and rehabilitation of the Property, that portion above and beyond $1,000 of the line of credit is not eligible for inclusion in the new Mortgage;
      • ex-spouse or co-Borrower equity, as described in “Refinancing to Buy out Title Holder Equity” below;
      • interest due on the existing Mortgage(s);
      • Mortgage Insurance Premium (MIP) due on existing Mortgage;
      • any prepayment penalties assessed;
      • late charges; and
      • escrow shortages;
    • allowed costs include all Borrower paid costs associated with the new Mortgage; and
    • any Borrower-paid repairs required by the appraisal;
  • less any refund of the Upfront Mortgage Insurance Premium (UFMIP).

Short Payoffs

The Mortgagee may approve a Rate and Term refinance where the maximum mortgage amount is insufficient to extinguish the existing mortgage debt, provided the existing Note holder writes off the amount of the indebtedness that cannot be refinanced into the new FHA-insured Mortgage.

Refinancing to Buy Out Title-Holder Equity

When the purpose of the new Mortgage is to refinance an existing Mortgage to buy out an existing title-holder’s equity, the specified equity to be paid is considered property-related indebtedness and eligible to be included in the new mortgage calculation. The Mortgagee must obtain the divorce decree, settlement agreement, or other legally enforceable equity agreement to document the equity awarded to the title-holder.

Refinancing to Pay off Recorded Land Contracts

When the purpose of the new Mortgage is to pay off an outstanding recorded land contract, the unpaid principal balance will be deemed to be the outstanding balance on the recorded land contract.

Use of Estimates in Calculating Maximum Mortgage Amount

The Mortgagee may utilize estimates of existing debts and costs in calculating the maximum mortgage amount to the extent that the actual debts and costs do not result in the Borrower receiving greater than $500 cash back at mortgage Disbursement.

Cash to the Borrower resulting from the refund of Borrowers unused escrow balance from the previous Mortgage must not be considered in the $500 cash back limit whether received at or subsequent to mortgage Disbursement.

Excess Cash Back

When the estimated costs utilized in calculating the maximum mortgage amount result in greater than $500 cash back to the Borrower at mortgage Disbursement, Mortgagees may reduce the Borrower’s outstanding principal balance to satisfy the $500 cash back requirement. The Mortgagee must submit the Mortgage for endorsement at the reduced principle amount.

(ii) Required DocumentationThe Mortgagee must obtain the payoff statement on all existing Mortgages.

(c) Maximum Combined Loan-to-Value RatioThe maximum CLTV ratio for a Rate and Term refinance is 97.75 percent. For open-end line of credit, the Mortgagee must utilize the maximum accessible credit limit of the subordinate lien to calculate the CLTV ratio.

(3) Refinance of HOPE for Homeowners MortgagesIf the Mortgage being refinanced is a HOPE for Homeowners Mortgage, the Mortgagee must refer to the requirements in the HOPE for Homeowners Servicing Section.

(B) Simple Refinance

(1) Borrower Eligibility

(a) Occupancy Requirements

(i) StandardSimple Refinance is only permissible for owner-occupied Principal or HUD-approved Secondary Residences.

(ii) Required DocumentationThe Mortgagee must review the Borrower’s employment documentation or obtain utility bills to evidence the Borrower currently occupies the Property as their Principal Residence.The Mortgagee must obtain evidence that the Secondary Residence has been approved by the Jurisdictional HOC.

(b) Payment History Requirements (Manually Underwritten)

(i) StandardFor all mortgages on all properties with less than six months of Mortgage Payment history, the Borrower must have made all payments within the month due.For all mortgages on all properties with greater than six months history, the Borrower must have made all Mortgage Payments within the month due for the six months prior to case number assignment and have no more than one 30-Day late payment for the previous six months for all mortgages.The Borrower must have made the payments for all Mortgages secured by the subject Property for the month prior to mortgage Disbursement.

(ii) Required DocumentationIf the Mortgage on the subject Property is not reported in the Borrower’s credit report, the Mortgagee must obtain a verification of Mortgage to evidence payment history for the previous 12 months.

(2) Maximum Mortgage Amount

(a) Maximum LTVThe maximum LTV ratio for a Simple Refinance is:

• 75 percent for Principal Residences; and
• 85 percent for HUD-approved Secondary Residences.

(b) Maximum CLTVThe maximum CLTV for a Simple Refinance is:

• 75 percent for Principal Residences; and
• 85 percent for HUD-approved Secondary Residences.

(3) Calculating Maximum Mortgage Amount for Simple Refinance Transactions

(a) StandardThe maximum mortgage amount for a Simple Refinance is:

• the lesser of:
  • the Nationwide Mortgage Limit;
  • the Maximum LTV ratio from above; or
  • the sum of existing debt and costs associated with the transaction as follows:
    • existing debt includes:
      • unpaid principal balance of the FHA-insured first Mortgage as of the month prior to mortgage Disbursement;
      • interest due on the existing Mortgage;
      • MIP due on existing Mortgage;
      • late charges; and
      • escrow shortages;
    • allowed costs include all Borrower paid costs associated with the new Mortgage; and
    • Borrower-paid repairs required by the appraisal;
  • less any refund of UFMIP.

(b) Use of Estimates in Calculating Maximum Mortgage AmountThe Mortgagee may utilize estimates of existing debts and costs in calculating the maximum mortgage amount to the extent that the actual debts and costs do not result in the Borrower receiving greater than $500 cash back at mortgage Disbursement.Cash to the Borrower resulting from the refund of Borrower’s unused escrow balance from the previous Mortgage must not be considered in the $500 cash back limit whether received at or subsequent to mortgage Disbursement.

(c) Excess Cash BackWhen the estimated costs utilized in calculating the maximum mortgage amount resulted in greater than $500 cash back to the Borrower at mortgage Disbursement, Mortgagees may reduce the Borrower’s outstanding principal balance to satisfy the $500 cash back requirement.

(d) Required DocumentationThe Mortgagee must obtain the payoff statement for the existing Mortgage being refinanced.

(4) Upfront and Annual Mortgage Insurance PremiumSee Appendix 1.0 – Mortgage Insurance Premiums for assessing upfront and annual MIP.

(C) Streamline RefinancesStreamline Refinance may be used when the proceeds of the Mortgage are used to extinguish an existing FHA-insured first mortgage lien. Mortgagees must manually underwrite all Streamline Refinances in accordance with the guidance provided in this section.

(1) Streamline Refinance Exemptions

(a) Non-Credit Qualifying ExemptionsUnless otherwise stated in this section, the following sections of Origination through Post-Closing/Endorsement do not apply to non-credit qualifying Streamline Refinances:

• Ordering Appraisal
• Transferring Existing Appraisal
• Ordering Second Appraisal
• Ordering an Update to an Appraisal
• Borrower Minimum Decision Credit Score
• Borrower and Co-Borrower Ownership and Obligation Requirements
• Cosigner Requirements
• Principal Residence in the United States
• Military Personnel Eligibility
• Citizenship and Immigration Status
• Residency Requirements
• Borrower Ineligibility Due to Delinquent Federal Non-Tax Debt
• Delinquent Federal Tax Debt
• Property Eligibility and Acceptability Criteria
• National Housing Act’s Statutory Limits
• Nationwide Mortgage Limits
• LTV Limitations Based on Borrower’s Credit Score
• Underwriting the Property
• Underwriting the Borrower Using the TOTAL Mortgage Scorecard
• Credit Requirements (Manual)
• Income Requirements (Manual)
• Asset Requirements (Manual)
• Underwriting of Credit and Debt (Manual)
• Underwriting of Income (Manual)
• Underwriting of Assets (Manual)
• Calculating Qualifying Ratios (Manual)
• Approvable Ratio Requirements (Manual)
• Documenting Acceptable Compensating Factors (Manual)

(b) Credit Qualifying ExemptionsThe following sections of Origination through Post-Closing/Endorsement do not apply to credit qualifying Streamline Refinances:

• Ordering Appraisal
• Transferring Existing Appraisal
• Ordering Second Appraisal
• Ordering an Update to an Appraisal
• Borrower Ineligibility Due to Delinquent Federal Non-Tax Debt
• Delinquent Federal Tax Debt
• Property Eligibility and Acceptability Criteria
• National Housing Act’s Statutory Limits
• Nationwide Mortgage Limits
• LTV Limitations Based on Borrower’s Credit Score
• Underwriting the Property
• Underwriting the Borrower Using the TOTAL Mortgage Scorecard

(2) Borrower Eligibility

(a) Occupancy Requirements

(i) StandardStreamline Refinances may be used for Principal Residences, HUD-approved Secondary Residences, or non-owner occupied Properties.

(ii) Required DocumentationThe Mortgagee must review the Borrower’s employment documentation or obtain utility bills to evidence that the Borrower currently occupies the Property as their Principal Residence.The Mortgagee must obtain evidence that the Secondary Residence has been approved by the Jurisdictional HOC.The Mortgagee must process the Streamline Refinance as a non-owner occupied Property if the Mortgagee cannot obtain evidence that the Borrower occupies the Property either as a Principal or Secondary Residence.

(b) Payment History Requirements

(i) StandardNon-Credit QualifyingThe Borrower must have made all Mortgage Payments for all Mortgages on the subject Property within the month due for the six months prior to case number assignment and have no more than one 30-Day late payment for the previous six months for all Mortgages on the subject Property. The Borrower must have made the payments for all Mortgages secured by the subject Property within the month due for the month prior to mortgage Disbursement.Credit QualifyingFor all mortgages on all properties with less than six months of Mortgage Payment history, the Borrower must have made all payments within the month due.For all mortgages on all properties with greater than six months of Mortgage Payment history, the Borrower must have made all Mortgage Payments within the month due for the six months prior to case number assignment and have no more than one 30-Day late payment for the previous six months.The Borrower must have made the payments for all Mortgages secured by the subject Property within the month due for the month prior to mortgage Disbursement.

(ii) Required DocumentationIf the Mortgage on the subject Property is not reported in the Borrower’s credit report, the Mortgagee must obtain a verification of Mortgage to evidence payment history for the previous 12 months.

(3) Non-owner Occupied Properties and HUD-Approved Secondary ResidencesNon-owner occupied Properties and HUD-approved Secondary Residences are only eligible for Streamline Refinancing into a fixed rate Mortgage.

(4) General Information Applicable to All Streamline Refinances

(a) Mortgage Seasoning RequirementsOn the date of the FHA case number assignment:

• the Borrower must have made at least six payments on the FHA-insured Mortgage that is being refinanced;
• at least six full months must have passed since the first payment due date of the Mortgage that is being refinanced;
• at least 210 Days must have passed from the Closing Date of the Mortgage that is being refinanced; and
• if the Borrower assumed the Mortgage that is being refinanced, they must have made six payments since the time of assumption.

(b) Use of TOTAL Mortgage Scorecard on Streamline RefinancesThe Mortgagee must manually underwrite all Streamline Refinances. The Mortgagee may score the Mortgage through TOTAL Mortgage Scorecard but the findings are invalid.

(c) Net Tangible Benefit of Streamline Refinances

(i) DefinitionsA Net Tangible Benefit is a reduced Combined Rate, a reduced term, and/or a change from an ARM to a fixed rate Mortgage that results in a financial benefit to the Borrower.Combined Rate refers to the interest rate on the Mortgage plus the Mortgage Insurance Premium (MIP) rate.

(ii) StandardThe Mortgagee must determine that there is a net tangible benefit to the Borrower meeting the standards in the chart below for all Streamline Refinance transactions.

Reduction in TermThe net tangible benefit test is met if:

• the remaining amortization period of the existing Mortgage is reduced;
• the new interest rate does not exceed the current interest rate; and
• the combined principal, interest and MIP payment of the new Mortgage does not exceed the combined principal, interest and MIP of the refinanced Mortgage by more than $50.

(d) HUD Employee MortgageFor non-credit qualifying Streamline Refinances only, any HUD employee may have their Mortgage underwritten and approved/denied by the Mortgagee.

(e) Reviewing Limited Denial Participation and SAM Exclusion ListsThe Mortgagee must check the HUD Limited Denial of Participation (LDP) list to confirm the Borrower’s eligibility to participate in an FHA-insured mortgage transaction.The Mortgagee must check the System for Award Management (SAM) and must follow appropriate procedures defined by that system to confirm eligibility for participation.

(f) Borrower Additions to TitleIndividuals may be added to the title and Mortgage on a non-credit qualifying Streamline Refinance without a creditworthiness review.

(g) Borrower Credit ReportsFHA does not require a credit report on the non-credit qualifying Streamline Refinance. The Mortgagee must obtain a credit report for the credit qualifying Streamline Refinance.If the Mortgagee obtains a credit score, the Mortgagee must enter it into FHAC. If more than one credit score is obtained, the Mortgagee must enter all available credit scores into FHAC.

(h) Funds to CloseThe Mortgagee must verify Borrower’s funds to close, in excess of the total Mortgage Payment of the new Mortgage, in accordance with Sources of Funds.Additionally, the Mortgagee may provide an unsecured interest-free loan to establish a new escrow account in an amount not to exceed the present escrow balance on the existing Mortgage.

(i) Maximum Mortgage Amortization PeriodThe maximum amortization period of a Streamline Refinance is limited to the lesser of:

• the remaining amortization period of the existing Mortgage plus 12 years; or
• 30 years.

(j) Maximum Mortgage Calculation for Streamline Refinances

(i) StandardFor owner-occupied Principal Residences and HUD-approved Secondary Residences, the maximum Base Loan Amount for Streamline Refinances is:

• the lesser of:
  • the outstanding principal balance of the existing Mortgage as of the month prior to mortgage Disbursement; plus:
    • interest due on the existing Mortgage; and
    • MIP due on existing Mortgage; or
  • the original principal balance of the existing Mortgage (including financed UFMIP);
• less any refund of UFMIP.

For Investment Properties, the maximum Base Loan Amount for Streamline Refinances is:

• the lesser of:
  • the outstanding principal balance of the existing Mortgage as of the month prior to mortgage Disbursement; or
  • the original principal balance of the existing Mortgage (including financed UFMIP);
• less any refund of UFMIP.

Use of Estimates in Calculating Maximum Mortgage Amount

The Mortgagee may utilize estimates in calculating the maximum mortgage amount to the extent that the total mortgage amount does not result in the Borrower receiving greater than $500 cash back at mortgage Disbursement.

Cash to the Borrower resulting from the refund of Borrowers unused escrow balance from the previous Mortgage must not be considered in the $500 cash back limit whether received at or subsequent to mortgage Disbursement.

Excess Cash Back

When the estimates utilized in calculating the maximum mortgage amount resulted in greater than $500 cash back to the Borrower at mortgage Disbursement, Mortgagees may reduce the Borrower’s outstanding principal balance to satisfy the $500 cash back requirement.

(ii) Required DocumentationThe Mortgagee must obtain the payoff statement on the existing Mortgage.

(k) Maximum CLTV Ratio and Subordinate FinancingExisting Subordinate financing, in place at the time of case number assignment, must be resubordinated to the Streamline Refinance. New Subordinate financing is permitted only where the proceeds of the subordinate financing are used to:

• reduce the principal amount of the existing FHA-insured Mortgage, or
• finance the origination fees, other closing costs, or discount points associated with the refinance

There is no maximum CLTV.

Mortgagees must contact the National Servicing Center for processing of any HUD held lien subordination.

(l) Appraisal and Inspection Requirements on Streamline RefinancesAppraisals are not required on Streamline Refinances. The receipt or possession of an appraisal by the Mortgagee does not affect the eligibility or maximum mortgage amount on Streamline Refinances.

(m) Assessing Upfront and Annual MIPSee Appendix 1.0 – Mortgage Insurance Premiums for assessing upfront and annual MIP.For the purpose of calculating the MIP, FHA uses the original value of the Property to calculate the LTV.

(n) HOPE for Homeowners MortgagesHOPE for Homeowners Mortgages may not be refinanced using the FHA streamline process.

(5) Streamline Refinance Non-Credit Qualifying

(a) Borrower EligibilityA Borrower is eligible for a Streamline Refinance without credit qualification if all Borrowers on the existing Mortgage remain as Borrowers on the new Mortgage. Mortgages that have been assumed are eligible provided the previous Borrower was released from liability.ExceptionA Borrower on the Mortgage to be paid may be removed from title and new Mortgage in cases of divorce, legal separation or death when:

• the divorce decree or legal separation agreement awarded the Property and responsibility for payment to the remaining Borrower, if applicable; and
• the remaining Borrower can demonstrate that they have made the Mortgage Payments for a minimum of six months prior to case number assignment.

(b) Special Documentation and Procedures for No Credit Streamline RefinancesMortgagees may use an abbreviated Uniform Residential Loan Application (URLA, Fannie Mae Form 1003/Freddie Mac Form 65) on non-credit qualifying Streamline Refinances only. Mortgagees are not required to complete sections IV, V, VI, and VIII (a-k) on an abbreviated URLA, provided all other required information is captured.

(6) Streamline Refinance Credit Qualifying

(a) Borrower EligibilityAt least one Borrower from the existing Mortgage must remain as a Borrower on the new Mortgage.

(b) Credit UnderwritingIn addition to the requirements in this section, credit qualifying Streamline Refinances must meet all requirements of Manual Underwriting, except for any requirements for Appraisals or LTV Calculations.