FHA Streamline Refinance

If you already have an FHA mortgage and want to lower your interest rate and monthly payment, or switch from an ARM to a fixed-rate loan, an FHA streamline could be a smart option. For qualifying borrowers, the process is simpler than a traditional refinance. If your FHA loan is already with Pennymac, the process is even faster as no appraisal or income verification is required. If your loan is with another lender, we still offer a simplified process with no full appraisal and flexible credit requirements. The program also allows for higher loan-to-value ratios than many refinance programs, so even borrowers who have little or no equity in their home may qualify.

Here are some key conditions to meet in order to take advantage of the FHA streamline refinance program:

• You have an existing FHA-insured mortgage.
• You’ve made at least six monthly payments and have had the loan for 210 days or more.
• Your mortgage is in good standing, with no more than one late payment in the past 12 months.
• Your new home loan balance must not exceed the original amount.
• You must gain a “Net Tangible Benefit.” This means:
  • Refinancing from a Fixed-Rate: Your new combined rate (interest + MIP) must be at least 0.50% lower.
  • Refinancing from an ARM: You are switching to a fixed-rate loan.
• You may not obtain a cash amount over $500 through this type of refinance. If you are interested in finding out if you can take a substantial amount of cash based on your available equity, talk to a Pennymac Loan Expert about your cash-out refinance options.

Don’t have an FHA-insured mortgage? There are several other refinancing options available. Talk to a Pennymac Loan Expert to learn more.

As the #1 FHA lender in the nation, Pennymac has the expertise to guide you through the process. Our biggest advantage is for our existing Pennymac customers, who may be eligible for a streamline refinance with no appraisal, no credit report, and no income verification.

For all FHA borrowers, we have dedicated Loan Experts who can ensure you get the most benefit from your refinance and explore all your options.

Yes. All FHA loans require both an upfront mortgage insurance payment (UFMIP) and a monthly mortgage insurance payment. To avoid having to pay anything at closing, most borrowers opt to roll the UFMIP into the loan balance. If it has been less than three years since you got your original FHA mortgage, you may be eligible for a partial refund from the U.S. Department of Housing and Urban Development (HUD) on that initial UFMIP you paid. That refund can be applied toward your mortgage insurance payment on the new loan, reducing the amount you need to finance (or pay upfront).

No. While some borrowers may receive up to $500 in incidental cash back at closing, the main purpose the FHA streamline refinance program is intended to serve is to lower one’s rate and payment or allow one to switch from an adjustable-rate mortgage to a fixed-rate loan. It does not allow borrowers to use the loan to take out cash beyond that minimal amount of $500. If you are interested in finding out if you can take a substantial amount of cash based on your available equity, talk to a Pennymac Loan Expert about your cash-out refinance options.

This will depend on your current loan.

• If your FHA loan is already serviced by Pennymac, we can verify most of your information in our system. The process requires very little paperwork.
• If your FHA loan is with another lender, the process is still simplified, but you will need to provide:
  • A copy of your original mortgage note or closing disclosure.
  • A copy of your mortgage statement.
  • Homeowners insurance information.
  • Simplified income verification (like a Verbal Verification of Employment).

Yes. Unlike many government programs that are limited to primary residences, the FHA Streamline Refinance can be used on your primary home, a second home, or an investment property. This gives you the flexibility to lower the rate on your entire real estate portfolio, as long as the properties have FHA-insured loans.