A streamline refinance lets you take advantage of low rates, fast
With mortgage rates pushing 50-year lows, many homeowners are moving to refinance. And they want to do it fast, before rates rise again.
The best way to do that is with a streamline refinance.
If you qualify for one, a streamline refinance program lets you refi into today’s rates with next to no work.
You don’t have to verify your income or employment. Some lenders won’t look at your credit score. And you can even skip the home appraisal.
If you currently have an FHA, VA, or USDA mortgage, you might qualify for a streamlined rate reduction.
Check your streamline refinance eligibility today (Feb 28th, 2020)In this article (Skip to…)
- What is a streamline refinance?
- Am I eligible?
- FHA streamline and rates
- VA streamline and rates
- USDA streamline
- Fannie Mae HIRO program and rates
- FAQ
What is a streamline refinance?
The streamline refinance is designed to make refinancing easier for homeowners with government-backed mortgages.
With a streamline refinance, the lender is not required to re-check your income, credit, or employment — so the process can go a lot faster. These are also called “low-doc” mortgages because of the lack of paperwork involved.
And there are other benefits to a streamline refinance, too:
- No home appraisal means you can refi with little or no home equity
- No credit check means a lower credit score won’t raise your interest rate (though some lenders create their own minimums)
- No income or employment verification means you can refi even if you lost your job or took a pay cut
Plus, government-backed loans typically have lower rates than other mortgages.
So by using the streamline refinance, you could potentially secure a rate below market averages — which are currently near record lows.
Get your rates for a streamline refinace. Start here (Feb 28th, 2020)Who can use a streamline refinance?
All the major government-backed loans offer streamline refinancing. So there’s a good chance you can use a streamline refinance to lower your rate if you have an FHA loan, VA loan, or USDA loan.
However, not all candidates with a government-backed loan are automatically eligible for a streamline refinance.
You still have to meet certain requirements, which usually include a history of on-time payments and a clear benefit to refinancing. (More detail on those below.)
Check your streamline refinance eligibility (Feb 28th, 2020)You may notice conventional loans are missing from this list. Typically, homeowners with Fannie Mae or Freddie Mac mortgages are not eligible for any type of streamline refinance.
There’s just one exception. Homeowners whose mortgages are backed by Fannie Mae might qualify for the High LTV refinance option (HIRO).
HIRO is not technically a streamline refinance. But it has a lot of the same ‘low-doc’ characteristics — letting you get a better rate with little paperwork or re-verification.
You can read more about the Fannie Mae high LTV refinance option below.
FHA streamline refinance (for FHA loans)
The FHA streamline refinance is available to homeowners with FHA-insured mortgages.
To qualify for an FHA streamline refinance, you’ll need to meet these guidelines:
- 3 months of on-time mortgage payments
- At least 210 days since your last refinance
- There must be a clear benefit — usually you must lower your rate by around 0.50%
The FHA Streamline Refinance guidelines says that income, assets and credit are not verified; nor is employment. Appraisals are not required, either.
Via the FHA Streamline Refinance, homeowners whose FHA mortgage was endorsed on, or prior to, May 31, 2009 are eligible for special, reduced FHA mortgage insurance rates.
The FHA Streamline Refinance can be used on primary homes, vacation homes, and investment properties.
Check your FHA streamline eligibility (Feb 28th, 2020)FHA streamline refinance rates
FHA streamline refinance rates follow current rates for all FHA loans. Today’s average FHA rate is 2.875% (3.856% APR), as reported to The Mortgage Reports on February 28, 2020*.
| Loan Type | Current Rate |
| FHA 30-year fixed-rate | 2.875% (3.856% APR) |
*
VA streamline refinance “IRRRL”( for VA loans)
The VA Streamline Refinance program is available to homeowners with VA-guaranteed mortgages.
The program’s official name is the Interest Rate Reduction Refinance Loan (IRRRL) and it’s backed by the Department of Veterans Affairs.
To be eligible for a VA Streamline Refinance (IRRRL), you need to meet these guidelines:
- You must certify that you currently or previously occupied the home
- Your mortgage payment must be reduced by the refinance, except for ARM-to-Fixed Rate refinances
- Your mortgage payment history may not include more than one late payment in the last 12 months
VA Streamline Refinance guidelines state that income, assets and credit should not be verified; nor should employment. Furthermore, in most cases, home appraisals are not required to refinance.
Mortgage insurance is not required for the VA IRRRL, regardless of loan-to-value.
Check your VA streamline eligibility (Feb 28th, 2020)VA streamline refinance rates
VA streamline refinance rates are in line with current rates on other VA loans. Today’s average VA rate is 2.750% (2.926% APR), as reported to The Mortgage Reports on February 28, 2020*.
| Loan Type | Current Rate |
| VA 30-year fixed-rate | 2.750% (2.926% APR) |
| VA 15-year fixed-rate | 2.750% (3.076% APR) |
*
USDA streamline refinance (for USDA loans)
The USDA streamline refinance program is available to homeowners with USDA-guaranteed home loans.
As of 2017, this program is available in all 50 states. (It started as a pilot program in just 34 states.)
The eligibility requirements for the USDA Streamline Refinance are as follows :
- Your home to be refinanced must be your primary residence
- Your home must be in one of the 34 pre-approved states
- Your mortgage payment history may not include mortgage lates within the last 12 months
There is no income, credit, or employment verification via the USDA Streamline Refinance program; nor are appraisals required.
As with FHA and VA streamline refinancing, underwater properties may be refinanced via the USDA Streamline Refinance program.
Check your USDA streamline eligibility (Feb 28th, 2020)High LTV refinance option “HIRO” (for Fannie Mae loans)
The high LTV refinance option (HIRO) is not technically a streamline refinance. However, it has a lot of the same characteristics.
For instance, HIRO is designed for homeowners who have little or no equity in their homes. Like a streamline refinance, it can also be used if you’re “underwater” on your mortgage — meaning you owe more than the home is currently worth.
And like a streamline refinance, the HIRO mortgage does not require you to re-verify your income or credit. So it’s also a “low-doc” mortgage.
To qualify for the HIRO program, you need to meet these standards:
- Your current mortgage is owned by Fannie Mae
- You don’t have too much equity; the lowest loan-to-value ratio allowed is 97%, in most cases
- Your loan was opened on or after October 1, 2017, and you’ve had the loan at least 15 months
- You have no late payments in the last 6 months, and no more than one in the last year
Many lenders will only require a verbal verification of your employment, instead of pay stubs or W2s.
Check your HIRO program eligibility (Feb 28th, 2020)HIRO refinance rates (conventional rates)
| Loan Type | Current Rate |
| Conventional 30-year fixed-rate | 3.625% (3.625% APR) |
| Conventional 15-year fixed-rate | 3.750% (3.750% APR) |
*
Streamline refinance FAQ
If you qualify, using the streamline refinance is often a very good idea. It lets you refinance into a lower rate and monthly payment with very little effort or time required. And you can do so even if your mortgage is underwater — meaning you owe more than the home is currently worth. But still, a streamline refinance won’t be good for every single homeowner. You still need to make sure the savings are worth the upfront and long-term costs of refinancing. Remember, you still have to pay closing costs and your loan term restarts when you refinance.
The main benefits of a streamline refinance are: you can lower your interest rate and mortgage payment; there’s no income, credit, or employment verification; no home appraisal is required; and you can use it even if your mortgage is underwater. These benefits of a streamline refinance are basically unmatched by any other refinance program.
Yes, the FHA streamline refinance has closing costs just like any other mortgage. FHA streamline closing costs should be about 2-5% of your loan amount (less the home appraisal fee, which is generally about $500-$1,000). Also, expect to pay those fees out of pocket. You are not allowed to roll closing costs into your loan balance with the FHA streamline.
The rules to qualify for a streamline refinance vary depending on whether you have an FHA, VA, or USDA loan. In most cases, the minimum requirements to qualify for a streamline refinance are that your loan is the same type as the one you’re refinancing to (e.g. FHA to FHA); you have a proven history of on-time payments; and there’s a measurable benefit (“net tangible benefit”) to refinancing.
Technically, a streamline refinance does not require a credit check. VA, FHA, and USDA will all accept streamline refinance applications without re-verification of your credit score. In practice, however, many lenders set their own credit minimums. So if your credit score has fallen and your current lender will not approve you for a streamline refinance, it’s worth shopping around with other lenders to see if one will approve you.
No, you cannot take cash out with a streamline refinance.
FHA streamline does not get rid of PMI. Every FHA loan requires mortgage insurance, regardless of whether it’s a purchase or streamline refinance. However, you may be eligible for a refund of your upfront mortgage insurance (UFMIP) payment. That’s if you use the FHA streamline refinance within three years of getting the original loan. Learn more about the FHA streamline MIP refund here.
You can use the FHA streamline more than once as long as it’s been at least 210 days since your last refinance, you’ve made on-time payments, and there’s a benefit to the refinance. You can use the VA streamline refinance more than once too — again, provided you meet the minimum requirements for on-time payments and net tangible benefit.
A “streamline rate reduction” is the same thing as a streamline refinance. Specifically, the VA calls its refinance option the “Interest Rate Reduction Refinance Loan.” But the same could be said for similar offerings from FHA and USDA. All streamline refinances allow you to lower your mortgage rate and monthly payment with minimal paperwork and easy qualification standards (thus, the name “streamline”).
A streamline refinance (or “streamline mortgage”) works differently than other refinances. You can only apply for one if you have an FHA, VA, or USDA loan. Also, you do not have to re-verify your income, employment, or home value for a streamline refinance — which is the norm with almost all other mortgage programs. However, you are still allowed to shop around for the best ideal. You do not have to use your current mortgage lender for the streamline refinance program. In fact, you might save a lot more if you compare a few different mortgage lenders and find the lowest mortgage rate.
