FHA Streamline Refinance Requirements in North and South Carolina

FHA Streamline Refinance NC & SCWelcome to our comprehensive guide designed to illuminate the crucial FHA Streamline Refinance requirements specifically tailored for people who have an FHA loan and would like to lower the interest rate without a credit check or appraisal. in North and South Carolina. Whether you live in Charlotte, Raleigh, Columbia, or Charleston, understanding these requisites is fundamental for the successful navigation of an FHA streamline refinance.




1. Overview of FHA Streamline Refinance

  • Underwriting Requirements: Streamline refinances must be of an existing FHA-insured first mortgage and do not require an appraisal. These refinances can be used for primary residences, second homes (with HUD approval), and investment properties.


2. Net Tangible Benefit for Streamline Refinances

  • Underwriting Requirements: Borrowers must demonstrate a tangible benefit from the refinance, which could be a reduced term, rate reduction, or a switch from an ARM to a fixed-rate mortgage. The new combined rate must not exceed the current combined rate, and the payment increase is capped at $50.


3. Maximum Mortgage Calculation for Primary/Second Home Streamlines

  • Underwriting Requirements: The maximum mortgage is calculated as the lesser of the outstanding principal balance plus interest, late charges, escrow shortages, and MIP or the original mortgage balance (including financed UFMIP). Interest can be added back up to 60 days, and UFMIP refunds are deducted from the maximum base loan amount.


4. Funds to Close

  • Underwriting Requirements: Funds exceeding the PITI payment of the new mortgage must be verified. For escrow advances by correspondents, an agreement must be created and funds provided at closing. The borrower’s assets are verified through bank statements, and large deposits must be documented.


5. Types of Streamline Refinances

  • Non-Credit Qualifying: Limited documentation refinance that requires all borrowers on the original loan to be on the new loan, with certain exceptions.
  • Credit Qualifying: At least one borrower from the existing mortgage must remain on the new mortgage. Follows all other manual underwriting guidelines for credit and income.


6. Additional Requirements for Investment Properties

  • Underwriting Requirements: Market rent can be documented using Zillow/Trulia or a borrower’s statement. The current housing expense is also considered.


7. Case Number Expiration and Management

Underwriting Requirements: HUD automatically cancels a case number six months after it was ordered if no actions are taken. The underwriter must be aware of the expiration date and ensure the loan closes with an active case number, contacting HUD if necessary.

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