source:
  type: regulation
  id: hud-4000-1-programs-and-products-refinances
  authority: HUD Handbook 4000.1 — Programs and Products - Refinances (05/25/2025)
  description: "HUD Handbook 4000.1 section \"Programs and Products - Refinances\". Gap-fill (verbatim,\
    \ title-diff). \n"
obligations:
- id: hud-4000-1-programs-and-products-refinances-full
  canonical_id: hud-4000-1-programs-and-products-refinances-full
  section: HUD Handbook 4000.1
  description: "Programs and Products - Refinances: d. Refinances (05/25/2025) \nA Refinance Transaction\
    \ is used to pay off the existing debt or to withdraw equity \nfrom the Property with the proceeds\
    \ of a new Mortgage for a Borrower with legal title \nto the subject Property. \n(B) Types of Refinances\
    \ \n(1) Cash-Out \nA Cash-Out Refinance is a refinance …"
  type: do
  tags:
  - regulator-direct
  - section-complete
  - hud
  - 4000-1
  - curated
  primary_source:
    tier: 1
    authority: HUD Handbook 4000.1 — Programs and Products - Refinances (05/25/2025)
    source_class: hud-handbook-4000-1
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-06-18T00:00:00+00:00'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: "d. Refinances (05/25/2025) \nA Refinance Transaction is used to pay off the existing\
      \ debt or to withdraw equity \nfrom the Property with the proceeds of a new Mortgage for a Borrower\
      \ with legal title \nto the subject Property. \n(B) Types of Refinances \n(1) Cash-Out \nA Cash-Out\
      \ Refinance is a refinance of any Mortgage or a withdrawal of equity \nwhere no Mortgage currently\
      \ exists, in which the mortgage proceeds are not \nlimited to specific purposes. \n(2) No Cash-Out\
      \ \nA No Cash-Out Refinance is a refinance of any Mortgage in which the mortgage \nproceeds are\
      \ limited to the purpose of extinguishing the existing debt and costs \nassociated with the transaction.\
      \ FHA offers three types of no cash-out refinances: \n(a) Rate and Term \nRate and Term refers to\
      \ a no cash-out refinance of any Mortgage in which all \nproceeds are used to pay existing mortgage\
      \ liens on the subject Property and \ncosts associated with the transaction. \n(b) Simple Refinance\
      \ \nSimple Refinance refers to a no cash-out refinance of an existing FHA-insured \nMortgage in\
      \ which all proceeds are used to pay the existing FHA-insured \nmortgage lien on the subject Property\
      \ and costs associated with the \n(c) Streamline Refinance \nStreamline Refinance refers to the\
      \ refinance of an existing FHA-insured \nMortgage requiring limited Borrower credit documentation\
      \ and underwriting. \nThere are two different streamline options available. \n(i) Credit Qualifying\
      \ \nThe Mortgagee must perform a credit and capacity analysis of the \nBorrower, but no appraisal\
      \ is required. \n\n \n(ii) Non-credit Qualifying \nThe Mortgagee does not need to perform credit\
      \ or capacity analysis or \nobtain an appraisal. \n(3) Refinances for the Purpose of Rehabilitation\
      \ or Repair \nA Borrower may refinance existing debts and obtain additional financing for \npurposes\
      \ of rehabilitation and repair. Refer to 203(k) Rehabilitation Mortgage \nInsurance Program for\
      \ guidelines for refinances under FHA’s Section 203(k) \n(4) Refinancing of an Existing Section\
      \ 235 Mortgage \nAn existing Section 235 Mortgage may be refinanced as any no cash-out \nIn refinancing\
      \ a Section 235 Mortgage, the Mortgagee is required to repay to \nFHA any amount of excess subsidy.\
      \ The outstanding principal balance on a \nSection 235 is calculated by adding back to the balance\
      \ any amount of the excess \nsubsidy paid to FHA. \nIf FHA has a junior lien that was part of the\
      \ original Section 235 financing, FHA \nwill subordinate the junior lien to the Section 203(b) Mortgage\
      \ that refinances the \nSection 235 Mortgage. \nii. General Eligibility \n(A) FHA-Insured to FHA-Insured\
      \ Refinances \nFHA-insured to FHA-insured (FHA-to-FHA) refinances may be used with any \nrefinance\
      \ type. The Mortgagee must obtain a Refinance Authorization Number from \nFHA Connection (FHAC)\
      \ for all FHA-to-FHA refinances. \nFHA will not issue a new case number for any FHA to FHA Refinance\
      \ where the \nexisting Mortgage to be paid off has a repair or rehabilitation escrow account that\
      \ the \nEscrow Closeout Certification has not been completed in FHAC. \n(B) General Borrower Eligibility\
      \ \nAt least one Borrower on the refinancing Mortgage must hold title to the Property \nbeing refinanced\
      \ prior to case number assignment. \n\n \n(C) General Mortgage Eligibility \nThe Mortgagee must\
      \ not approve any Mortgage that refinances or otherwise \nreplaces a Mortgage that has been subject\
      \ to eminent domain condemnation or \nseizure, by a state, municipality, or any other political\
      \ subdivision of a state. \nIf the Mortgage to be insured is located in an area where a state, municipality,\
      \ or \nother political subdivision has exercised eminent domain condemnation or seizure \nof a Mortgage,\
      \ the Mortgagee must obtain a certification from the Borrower \nstating the Mortgage being refinanced\
      \ was not subject to eminent domain \ncondemnation or seizure. \niii. Temporary Interest Rate Buydowns\
      \ \nTemporary interest rate buydowns are not permitted with refinance transactions. \niv. Upfront\
      \ Mortgage Insurance Premium Refunds \nIf the Borrower is refinancing their current FHA-insured\
      \ Mortgage to another FHAinsured Mortgage within 3 years, a refund credit is applied to reduce the\
      \ amount of the \nUpfront Mortgage Insurance Premium (UFMIP) paid on the refinanced Mortgage, \n\
      according to the refund schedule shown in the table below: \nUpfront Mortgage Insurance Premium\
      \ Refund Percentages \nYear \nMonth of Year \n \nv. Cash-Out Refinances \nNonprofit agencies, state\
      \ and local government agencies and Instrumentalities of \nGovernment are not eligible for cash-out\
      \ refinances. Income from a non-occupant coBorrower may not be used to qualify for a cash-out refinance.\
      \ \nIf the subject Property is a one-unit with an Accessory Dwelling Unit (ADU), rental \nincome\
      \ from the ADU cannot be used as Effective Income to qualify for a cash-out \n\n \nMortgagees must\
      \ apply this requirement for both Mortgages underwritten through \nTOTAL Scorecard and manual underwriting.\
      \ \n(1) Occupancy Requirements \nCash-out refinance transactions are only permitted on owner-occupied\
      \ \nPrincipal Residences. \nThe Property securing the cash-out refinance must have been owned and\
      \ \noccupied by at least one Borrower as their Principal Residence for the 12 \nmonths prior to\
      \ the date of case number assignment. \nIf the Property is a Manufactured Home, it must have been\
      \ permanently \ninstalled on a site for more than 12 months prior to case number assignment. \n\
      In the case of inheritance, a Borrower is not required to occupy the Property \nfor a minimum period\
      \ of time before applying for a cash-out refinance, \nprovided the Borrower has not treated the\
      \ subject Property as an Investment \nProperty at any point since inheritance of the Property. If\
      \ the Borrower rents \nthe Property following inheritance, the Borrower is not eligible for cash-out\
      \ \nrefinance until the Borrower has occupied the Property as a Principal \nResidence for at least\
      \ 12 months. \nThe Mortgagee must review the Borrower’s employment documentation or \nobtain utility\
      \ bills to evidence the Borrower has occupied the subject Property \nas their Principal Residence\
      \ for the 12 months prior to case number \nassignment. \n(2) Payment History Requirements \nFor\
      \ both Mortgages underwritten through TOTAL Scorecard and manually \nunderwritten Mortgages, the\
      \ Mortgagee must document that the Borrower has \nmade all payments for all their Mortgages within\
      \ the month due for the \nprevious 12 months or since the Borrower obtained the Mortgages, whichever\
      \ \nis less. \nAdditionally, the payments for all Mortgages secured by the subject Property \nmust\
      \ have been paid within the month due for the month prior to mortgage \n\n \nSubject Properties\
      \ with Mortgages must have a minimum of six months of \nMortgage Payments on the current loan. Properties\
      \ owned free and clear may \nbe refinanced as cash-out transactions. \n• made at least 12 consecutive\
      \ Mortgage Payments within the month due \non the Mortgage since completing the Forbearance Plan.\
      \ \ncredit report or is not in the name of the Borrower, the Mortgagee must obtain \na verification\
      \ of Mortgage, bank statements or other documentation to \nevidence that all payments have been\
      \ made by the Borrower in the month due \nfor the previous 12 months. \nPlan within the 12 months\
      \ prior to case number assignment, the Mortgagee \nmust obtain: \nA Forbearance Plan is not required\
      \ if the forbearance was due to the impacts \nof the COVID-19 National Emergency. \n(B) Maximum\
      \ Mortgage Amounts \n(a) Maximum Loan-to-Value \nThe maximum LTV is 80 percent of the Adjusted Value.\
      \ \n(b) Maximum Combined Loan-to-Value \nThe maximum CLTV is 80 percent of the Adjusted Value. \n\
      (c) Nationwide Mortgage Limit \nThe combined mortgage amount of the first Mortgage and any subordinate\
      \ \nliens cannot exceed the Nationwide Mortgage Limit described in National \nHousing Act’s Statutory\
      \ Limits. \n\n \nThe Mortgagee must obtain the payoff statement for all existing Mortgages. \nvi.\
      \ No Cash-Out Refinances \n(A) Rate and Term \n(1) Borrower Eligibility \nRate and Term refinance\
      \ transactions are only permitted on owneroccupied Principal Residences and HUD-approved Secondary\
      \ Residences. \nThe Mortgagee must review the Borrower’s employment documentation \nor obtain utility\
      \ bills to evidence the Borrower currently occupies the \nProperty and determine the length of time\
      \ the Borrower has occupied the \nsubject Property as their Principal Residence. \n(b) Payment History\
      \ Requirements (Manually Underwritten) \nFor all mortgages on all properties with greater than six\
      \ months history, \nthe Borrower must have made all Mortgage Payments within the month \ndue for\
      \ the six months prior to case number assignment and have no more \nthan one 30-Day late payment\
      \ for the previous six months for all \n• made at least three consecutive Mortgage Payments within\
      \ the \nmonth due on the Mortgage since completing the Forbearance \nthe subject Property for the\
      \ month prior to Mortgage Disbursement. \n\n \nWhere a mortgage reflects payments under a modification\
      \ or Forbearance \n• evidence of the payment amount and dates of payments during the \nA Forbearance\
      \ Plan is not required if the forbearance was due to the \nimpacts of the COVID-19 National Emergency.\
      \ \n(2) Maximum Mortgage Amount \n(a) Maximum Loan-to-Value Ratio \nThe maximum LTV for a Rate and\
      \ Term refinance is: \n• 97.75 percent for Principal Residences that have been owner-occupied \n\
      for the previous 12 months, or owner-occupied since acquisition if \nacquired within 12 months,\
      \ at case number assignment; \n• 85 percent for a Borrower who has occupied the subject Property\
      \ as \ntheir Principal Residence for fewer than 12 months prior to the case \nnumber assignment\
      \ date; or if owned less than 12 months, has not \noccupied the Property for that entire period\
      \ of ownership; or \n• 85 percent for all HUD-approved Secondary Residences. \n(b) Calculating Maximum\
      \ Mortgage Amount \nThe maximum mortgage amount for a Rate and Term refinance is: \no the Nationwide\
      \ Mortgage Limit; \no the maximum LTV based on the Maximum LTV Ratio from \nabove; or \no the sum\
      \ of existing debt and costs associated with the \ntransaction as follows: \n▪ existing debt includes:\
      \ \n• the unpaid principal balance of the first Mortgage as of \nthe month prior to mortgage Disbursement;\
      \ \n\n \n• the unpaid principal balance of any purchase money \njunior Mortgage as of the month\
      \ prior to mortgage \n• the unpaid principal balance of any junior liens over 12 \nmonths old as\
      \ of the date of mortgage Disbursement. If \nthe balance or any portion of an equity line of credit\
      \ in \nexcess of $1,000 was advanced within the past 12 \nmonths and was for purposes other than\
      \ repairs and \nrehabilitation of the Property, that portion above and \nbeyond $1,000 of the line\
      \ of credit is not eligible for \ninclusion in the new Mortgage; \n• ex-spouse or co-Borrower equity,\
      \ as described in \n“Refinancing to Buy Out Title-Holder Equity” below; \n• interest due on the\
      \ existing Mortgage(s); \n• the unpaid principal balance of any unpaid PACE \nobligation; \n• Mortgage\
      \ Insurance Premium (MIP) due on existing \nMortgage; \n• any prepayment penalties assessed; \n\
      • escrow shortages; \n▪ allowed costs include all Borrower-paid costs associated \nwith the new\
      \ Mortgage; and \n▪ any Borrower-paid repairs required by the appraisal; \n• less any refund of\
      \ the Upfront Mortgage Insurance Premium \n(UFMIP). \nShort Payoffs \nThe Mortgagee may approve\
      \ a Rate and Term refinance where the \nmaximum mortgage amount is insufficient to extinguish the\
      \ existing \nmortgage debt, provided the existing Note holder writes off the amount of \nthe indebtedness\
      \ that cannot be refinanced into the new FHA-insured \nRefinancing to Buy Out Title-Holder Equity\
      \ \nWhen the purpose of the new Mortgage is to refinance an existing \nMortgage to buy out an existing\
      \ title holder’s equity, the specified equity \nto be paid is considered property-related indebtedness\
      \ and eligible to be \nincluded in the new mortgage calculation. The Mortgagee must obtain the \n\
      divorce decree, settlement agreement, or other legally enforceable equity \nagreement to document\
      \ the equity awarded to the title holder. \n\n \nRefinancing to Pay off Recorded Land Contracts\
      \ \nWhen the purpose of the new Mortgage is to pay off an outstanding \nrecorded land contract,\
      \ the unpaid principal balance will be deemed to be \nthe outstanding balance on the recorded land\
      \ contract. \nUse of Estimates in Calculating Maximum Mortgage Amount \nThe Mortgagee may utilize\
      \ estimates of existing debts and costs in \ncalculating the maximum mortgage amount to the extent\
      \ that the actual \ndebts and costs do not result in the Borrower receiving greater than $500 \n\
      cash back at mortgage Disbursement. \nCash to the Borrower resulting from the refund of Borrowers’\
      \ unused \nescrow balance from the previous Mortgage must not be considered in the \n$500 cash back\
      \ limit whether received at or subsequent to mortgage \nExcess Cash Back \nWhen the estimated costs\
      \ utilized in calculating the maximum mortgage \namount result in greater than $500 cash back to\
      \ the Borrower at mortgage \nDisbursement, Mortgagees may reduce the Borrower’s principal balance\
      \ \non the subject loan to satisfy the $500 cash back requirement. The \nMortgagee must submit the\
      \ Mortgage for endorsement at the reduced \nprincipal amount. \nThe Mortgagee must obtain the payoff\
      \ statement on all existing \n(c) Maximum Combined Loan-to-Value Ratio \nThe maximum CLTV ratio\
      \ for a Rate and Term refinance is 97.75 percent. \nFor open-end line of credit, the Mortgagee must\
      \ utilize the maximum \naccessible credit limit of the subordinate lien to calculate the CLTV ratio.\
      \ \n(3) Refinance of HOPE for Homeowners Mortgages \nIf the Mortgage being refinanced is a HOPE\
      \ for Homeowners Mortgage, the \nMortgagee must refer to the requirements in the HOPE for Homeowners\
      \ servicing \n\n \n(B) Simple Refinance \n(1) Borrower Eligibility \nSimple Refinance is only permissible\
      \ for owner-occupied Principal or \nHUD-approved Secondary Residences. \nThe Mortgagee must review\
      \ the Borrower’s employment documentation \nor obtain utility bills to evidence the Borrower currently\
      \ occupies the \nProperty as their Principal Residence. \nThe Mortgagee must obtain evidence that\
      \ the Secondary Residence has \nbeen approved by FHA. \n(b) Payment History Requirements (Manually\
      \ Underwritten) \nFor all mortgages on all properties with greater than six months history, \nthe\
      \ Borrower must have made all Mortgage Payments within the month \ndue for the six months prior\
      \ to case number assignment and have no more \nthan one 30-Day late payment for the previous six\
      \ months for all \n• made at least three consecutive Mortgage Payments within the \nmonth due on\
      \ the Mortgage since completing the Forbearance \nthe subject Property for the month prior to Mortgage\
      \ Disbursement. \n\n \nA Forbearance Plan is not required if the forbearance was due to the \nimpacts\
      \ of the COVID-19 National Emergency. \n(2) Maximum Mortgage Amount \n(a) Maximum Loan-to-Value\
      \ \nThe maximum LTV ratio for a Simple Refinance is: \n• 97.75 percent for Principal Residences;\
      \ and \n• 85 percent for HUD-approved Secondary Residences. \n(b) Maximum Combination Loan-to-Value\
      \ \nThe maximum CLTV for a Simple Refinance is: \n• 97.75 percent for Principal Residences; and\
      \ \n• 85 percent for HUD-approved Secondary Residences. \n(3) Calculating Maximum Mortgage Amount\
      \ for Simple Refinance \nTransactions \nThe maximum mortgage amount for a Simple Refinance is: \n\
      o the Nationwide Mortgage Limit; \no the maximum LTV ratio from above; or \no the sum of existing\
      \ debt and costs associated with the transaction \n▪ existing debt includes: \n• unpaid principal\
      \ balance of the FHA-insured first Mortgage \nas of the month prior to mortgage Disbursement; \n\
      • interest due on the existing Mortgage; \n• the unpaid principal balance of any PACE obligation;\
      \ \n• MIP due on existing Mortgage; \n\n \n• escrow shortages; \n▪ allowed costs include all Borrower-paid\
      \ costs associated with \nthe new Mortgage; and \n▪ Borrower-paid repairs required by the appraisal;\
      \ \n(b) Use of Estimates in Calculating Maximum Mortgage Amount \nThe Mortgagee may utilize estimates\
      \ of existing debts and costs in calculating \nthe maximum mortgage amount to the extent that the\
      \ actual debts and costs do \nnot result in the Borrower receiving greater than $500 cash back at\
      \ mortgage \nCash to the Borrower resulting from the refund of Borrower’s unused escrow \nbalance\
      \ from the previous Mortgage must not be considered in the $500 cash \nback limit whether received\
      \ at or subsequent to mortgage Disbursement. \n(c) Excess Cash Back \nWhen the estimated costs utilized\
      \ in calculating the maximum mortgage \namount resulted in greater than $500 cash back to the Borrower\
      \ at mortgage \nDisbursement, Mortgagees may reduce the Borrower’s principal balance on \nthe subject\
      \ loan to satisfy the $500 cash back requirement. \nThe Mortgagee must obtain the payoff statement\
      \ for the existing Mortgage \nbeing refinanced. \n(4) Upfront and Annual Mortgage Insurance Premium\
      \ \nSee Appendix 1.0 – Mortgage Insurance Premiums for assessing upfront and \nannual MIP. \n(C)\
      \ Streamline Refinances \nStreamline Refinance may be used when the proceeds of the Mortgage are\
      \ used to \nextinguish an existing FHA-insured first mortgage lien. Mortgagees must manually \n\
      underwrite all Streamline Refinances in accordance with the guidance provided in \nthis section.\
      \ \n\n \n(1) Streamline Refinance Exemptions \n(a) Non-credit Qualifying Exemptions \nUnless otherwise\
      \ stated in this section, the following sections of Origination \nthrough Post-closing/Endorsement\
      \ do not apply to non-credit qualifying \nStreamline Refinances: \n• Borrower Minimum Decision Credit\
      \ Score \n• Borrower and Co-Borrower Ownership and Obligation Requirements \n• Co-signer Requirements\
      \ \n• Principal Residence in the United States \n• Military Personnel Eligibility \n• Borrower Ineligibility\
      \ Due to Delinquent Federal Non-Tax Debt \n• Delinquent Federal Tax Debt \n• LTV Limitations Based\
      \ on Borrower’s Credit Score \n• Credit Requirements (Manual) \n• Income Requirements (Manual) \n\
      • Asset Requirements (Manual) \n• Underwriting of Credit and Debt (Manual) \n• Underwriting of Income\
      \ (Manual) \n• Underwriting of Assets (Manual) \n• Calculating Qualifying Ratios (Manual) \n• Approvable\
      \ Ratio Requirements (Manual) \n• Documenting Acceptable Compensating Factors (Manual) \n(b) Credit\
      \ Qualifying Exemptions \nThe following sections of Origination through Post-closing/Endorsement\
      \ do \nnot apply to credit qualifying Streamline Refinances: \n• Borrower Ineligibility Due to Delinquent\
      \ Federal Non-Tax Debt \n• Delinquent Federal Tax Debt \n\n \n• LTV Limitations Based on Borrower’s\
      \ Credit Score \n(2) Borrower Eligibility \nStreamline Refinances may be used for Principal Residences,\
      \ HUDapproved Secondary Residences, or non-owner occupied Properties. \nThe Mortgagee must review\
      \ one of the following to evidence that the \nBorrower currently occupies the Property as their\
      \ Principal Residence: \n• Borrower’s employment documentation; \n• utility bills; or \n• direct\
      \ electronic verification by a Third Party Verification (TPV) \nvendor verifying the Borrower’s\
      \ address is the same as that of the \nThe Mortgagee must obtain evidence that the Secondary Residence\
      \ has \nbeen approved by FHA. \nThe Mortgagee must process the Streamline Refinance as a non-owner\
      \ \noccupied Property if the Mortgagee cannot obtain evidence that the \nBorrower occupies the Property\
      \ either as a Principal or Secondary \n(b) Payment History Requirements \nNon-credit Qualifying\
      \ \nThe Borrower must have made all Mortgage Payments for all Mortgages \non the subject Property\
      \ within the month due for the six months prior to \ncase number assignment and have no more than\
      \ one 30-Day late payment \nfor the previous six months for all Mortgages on the subject Property.\
      \ The \nBorrower must have made the payments for all Mortgages secured by the \nsubject Property\
      \ within the month due for the month prior to mortgage \n\n \nA Borrower who was granted mortgage\
      \ payment forbearance on the \nsubject Property is eligible for a non-credit qualifying Streamline\
      \ \nRefinance and considered to have acceptable Mortgage Payment history \nprovided that, at the\
      \ time of case number assignment, the Borrower has: \n• made at least three consecutive monthly\
      \ Mortgage Payments \nwithin the month due on the Mortgage since completing the \nForbearance Plan.\
      \ \nCredit Qualifying \nFor all mortgages on all properties with greater than six months of \nMortgage\
      \ Payment history, the Borrower must have made all Mortgage \nPayments within the month due for\
      \ the six months prior to case number \nassignment and have no more than one 30-Day late payment\
      \ for the \nprevious six months. \nthe subject Property within the month due for the month prior\
      \ to mortgage \nA Borrower who is still in mortgage payment forbearance at the time of \ncase number\
      \ assignment, or has made less than three consecutive monthly \nMortgage Payments within the month\
      \ due since completing the \nForbearance Plan, is eligible for a credit qualifying Streamline Refinance\
      \ \nprovided the Borrower: \n• made all Mortgage Payments within the month due for the six \nmonths\
      \ prior to forbearance; and \n• had no more than one 30-Day late payment for the previous six \n\
      \n \n• a copy of the Modification or Forbearance Plan; and \nagreement term. \nDocumentation of\
      \ a Forbearance Plan is not required if the forbearance \nwas due to the impacts of the COVID-19\
      \ National Emergency. \n(3) Non-owner Occupied Properties and HUD-Approved Secondary \nResidences\
      \ \nNon-owner occupied Properties and HUD-approved Secondary Residences are \nonly eligible for\
      \ Streamline Refinancing into a fixed rate Mortgage. \n(4) General Information Applicable to All\
      \ Streamline Refinances \n(a) Mortgage Seasoning Requirements \nOn the date of the FHA case number\
      \ assignment: \n• the Borrower must have made at least six payments on the FHAinsured Mortgage that\
      \ is being refinanced (where the FHA-insured \nMortgage has been modified, the Borrower must have\
      \ made at least six \npayments under the modification agreement); \n• at least six full months must\
      \ have passed since the first payment due \ndate of the Mortgage that is being refinanced; \n• at\
      \ least 210 Days must have passed from the Closing Date of the \nMortgage that is being refinanced;\
      \ and \n• if the Borrower assumed the Mortgage that is being refinanced, they \nmust have made six\
      \ payments since the time of assumption. \n(b) Use of TOTAL Mortgage Scorecard on Streamline Refinances\
      \ \nThe Mortgagee must manually underwrite all Streamline Refinances. The \nMortgagee may score\
      \ the Mortgage through TOTAL Mortgage Scorecard but \nthe findings are invalid. \n(c) Net Tangible\
      \ Benefit of Streamline Refinances \nA Net Tangible Benefit is a reduced Combined Rate, a change\
      \ from an \nARM to a fixed rate Mortgage, and/or a reduced term that results in a \nfinancial benefit\
      \ to the Borrower. \n\n \nCombined Rate refers to the interest rate on the Mortgage plus the \n\
      Mortgage Insurance Premium (MIP) rate. \nReduction in Term refers to the reduction of the remaining\
      \ amortization \nperiod of the existing Mortgage. \n(ii) Standard for Refinances without a Term\
      \ Reduction or with a \nTerm Reduction of Less Than Three Years \nThe Mortgagee must determine that\
      \ there is a net tangible benefit to the \nBorrower meeting the standards in the chart below for\
      \ all Streamline \nRefinance transactions without a reduction in term or with a reduction in \n\
      term of less than three years. \n \nTo \nFrom \nOne-Year ARM \nHybrid ARM \nAt least 0.5 \nbelow\
      \ the prior \nLess Than 15 \nMonths to Next \nPayment Change \nGreater Than or \nEqual to 15 Months\
      \ \nto Next Payment \nChange Date \n \n(iii) Standard for Refinances with a Term Reduction of Three\
      \ Years \nor More \nThe Mortgagee must determine that there is a net tangible benefit to the \n\
      Borrower meeting the standards in the chart below for all Streamline \nRefinance transactions with\
      \ a reduction in term of three years or more. \nAdditionally, the combined principal, interest,\
      \ and MIP payment of the \nnew Mortgage must not exceed the combined principal, interest, and MIP\
      \ \npayment of the refinanced Mortgage by more than $50. \n\n \n \nTo \nFrom \nOne-Year ARM \nHybrid\
      \ ARM \nBelow the prior \nLess Than 15 \nMonths to Next \nPayment Change \nGreater Than or \nEqual\
      \ to 15 Months \nto Next Payment \nChange Date \n \n(d) HUD Employee Mortgage \nFor non-credit qualifying\
      \ Streamline Refinances only, any HUD employee \nmay have their Mortgage underwritten and approved/denied\
      \ by the \n(e) Reviewing Limited Denial Participation and SAM Exclusion Lists \nThe Mortgagee must\
      \ check the HUD Limited Denial of Participation (LDP) \nList to confirm the Borrower’s eligibility\
      \ to participate in an FHA-insured \nmortgage transaction. \nThe Mortgagee must check the System\
      \ for Award Management (SAM) and \nmust follow appropriate procedures defined by that system to\
      \ confirm \neligibility for participation. \n(f) Borrower Additions to Title \nIndividuals may be\
      \ added to the title and Mortgage on a non-credit qualifying \nStreamline Refinance without a creditworthiness\
      \ review. \n(g) Borrower Credit Reports \nFHA does not require a credit report on the non-credit\
      \ qualifying Streamline \nRefinance. The Mortgagee must obtain a credit report for the credit qualifying\
      \ \nStreamline Refinance. \nIf the Mortgagee obtains a credit score, the Mortgagee must enter it\
      \ into \nFHAC. If more than one credit score is obtained, the Mortgagee must enter all \navailable\
      \ credit scores into FHAC. \n\n \n(h) Funds to Close \nIf the funds to close exceed the total Mortgage\
      \ Payment of the new Mortgage, \nthe Mortgagee must verify the full amount of the Borrower’s funds\
      \ to close in \naccordance with Sources of Funds. \nAdditionally, the Mortgagee may provide an unsecured\
      \ interest-free loan to \nestablish a new escrow account in an amount not to exceed the present\
      \ escrow \nbalance on the existing Mortgage. \n(i) Maximum Mortgage Amortization Period \nThe maximum\
      \ amortization period of a Streamline Refinance is limited to the \n• the remaining amortization\
      \ period of the existing Mortgage plus 12 \n• 30 years. \n(j) Maximum Mortgage Calculation for Streamline\
      \ Refinances \nFor owner-occupied Principal Residences and HUD-approved Secondary \nResidences,\
      \ the maximum Base Loan Amount for Streamline Refinances \nis: \no the outstanding principal balance\
      \ of the existing Mortgage as \nof the month prior to mortgage Disbursement; plus: \n▪ interest\
      \ due on the existing Mortgage; \n▪ Late Charges; \n▪ escrow shortages; and \n▪ MIP due on existing\
      \ Mortgage; or \no the original principal balance of the existing Mortgage \n(including financed\
      \ UFMIP); \nFor Investment Properties, the maximum Base Loan Amount for \nStreamline Refinances\
      \ is: \no the outstanding principal balance of the existing Mortgage as \nof the month prior to\
      \ mortgage Disbursement; or \no the original principal balance of the existing Mortgage \n(including\
      \ financed UFMIP); \n\n \nUse of Estimates in Calculating Maximum Mortgage Amount \nThe Mortgagee\
      \ may utilize estimates in calculating the maximum \nmortgage amount to the extent that the total\
      \ mortgage amount does not \nresult in the Borrower receiving greater than $500 cash back at mortgage\
      \ \nCash to the Borrower resulting from the refund of Borrowers unused \nescrow balance from the\
      \ previous Mortgage must not be considered in the \n$500 cash back limit whether received at or\
      \ subsequent to mortgage \nExcess Cash Back \nWhen the estimates utilized in calculating the maximum\
      \ mortgage amount \nresulted in greater than $500 cash back to the Borrower at mortgage \nDisbursement,\
      \ Mortgagees may reduce the Borrower’s principal balance \non the subject loan to satisfy the $500\
      \ cash back requirement. \nThe Mortgagee must obtain the payoff statement on the existing \n(k)\
      \ Maximum Combination Loan-to-Value Ratio and Subordinate \nFinancing \nExisting subordinate financing,\
      \ in place at the time of case number \nassignment, must be resubordinated to the Streamline Refinance.\
      \ New \nsubordinate financing is permitted only where the proceeds of the subordinate \nfinancing\
      \ are used to: \n• reduce the principal amount of the existing FHA-insured Mortgage; or \n• finance\
      \ the origination fees, other closing costs, prepaid items, or \nDiscount Points associated with\
      \ the refinance. \nThere is no maximum CLTV. \nMortgagees must contact the National Servicing Center\
      \ for processing of any \nHUD-held lien subordination. \n(l) Appraisal and Inspection Requirements\
      \ on Streamline Refinances \nAppraisals are not required on Streamline Refinances. The receipt or\
      \ \npossession of an appraisal by the Mortgagee does not affect the eligibility or \nmaximum mortgage\
      \ amount on Streamline Refinances. \n\n \n(m)Assessing Upfront and Annual MIP \nSee Appendix 1.0\
      \ – Mortgage Insurance Premiums for assessing upfront and \nannual MIP. \nFor the purpose of calculating\
      \ the MIP, FHA uses the original value of the \nProperty to calculate the LTV. \n(n) HOPE for Homeowners\
      \ Mortgages \nHOPE for Homeowners Mortgages may not be refinanced using the FHA \nstreamline process.\
      \ \n(5) Streamline Refinance Non-credit Qualifying \n(a) Borrower Eligibility \nA Borrower is eligible\
      \ for a Streamline Refinance without credit qualification \nif all Borrowers on the existing Mortgage\
      \ remain as Borrowers on the new \nMortgage. Mortgages that have been assumed are eligible provided\
      \ the \nprevious Borrower was released from liability. \nA Borrower on the Mortgage to be paid may\
      \ be removed from title and new \nMortgage in cases of divorce, legal separation or death when:\
      \ \n• the divorce decree or legal separation agreement awarded the Property \nand responsibility\
      \ for payment to the remaining Borrower, if \n• the remaining Borrower can demonstrate that they\
      \ have made the \nMortgage Payments for a minimum of six months prior to case number \nassignment.\
      \ \n(b) Special Documentation and Procedures for Non-credit Qualifying \nStreamline Refinances \n\
      Mortgagees may use an abbreviated Fannie Mae Form 1003/Freddie Mac \nForm 65, Uniform Residential\
      \ Loan Application (URLA) on non-credit \nqualifying Streamline Refinances only. For non-credit\
      \ qualifying Streamline \nRefinances, Mortgagees are not required to complete Sections 1b-1e, 2,\
      \ 3, or \n5, with the exception of 5a.A (Occupancy), which must be answered. \n\n \n(6) Streamline\
      \ Refinance Credit Qualifying \n(a) Borrower Eligibility \nAt least one Borrower from the existing\
      \ Mortgage must remain as a Borrower \non the new Mortgage. \n(b) Credit Underwriting \nIn addition\
      \ to the requirements in this section, credit qualifying Streamline \nRefinances must meet all requirements\
      \ of manual underwriting, except for any \nrequirements for Appraisals or LTV Calculations."
    drafter_attestation: Verbatim section from snapshot 8c03836f77f317e1; boundary human-curated + substring-verified
      (2026-07-23).
  judgment: false
