source:
  type: regulation
  id: hud-4000-1-ii-a-8-refinances
  authority: HUD Handbook 4000.1 Part II.A.8.d — Refinances (Forward Mortgages)
  description: 'HUD Handbook 4000.1 Part II.A.8.d governs FHA Title II forward

    Refinance Mortgages: Refinance-Transaction definition, Cash-Out vs

    No-Cash-Out classification (Rate-and-Term, Simple, Streamline with

    Credit Qualifying + Non-credit Qualifying variants), 203(k)-

    program reference, Section 235 refinance treatment, FHA-to-FHA

    Refinance Authorization Number requirement, prior-Escrow-Closeout-

    Certification rule, at-least-one-Borrower-title rule, eminent-

    domain-replacement prohibition, temporary-buydown prohibition,

    UFMIP refund schedule, and cash-out borrower-eligibility carve-

    outs. Fills HUD 4000.1 II.A.8 Refinances chapter gap.

    '
obligations:
- id: hud-4000-1-ii-a-8-refinances-full
  canonical_id: hud-4000-1-ii-a-8-refinances-full
  section: HUD Handbook 4000.1 Part II.A.8.d
  description: "Programs and Products - Refinances: (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. Ref…"
  type: do
  tags:
  - regulator-direct
  - section-complete
  - hud
  - 4000-1
  - curated
  primary_source:
    tier: 1
    authority: HUD Handbook 4000.1 II.A.8.d.ii(B) — General Borrower Eligibility
    source_class: hud-handbook-4000-1
    source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/40001HSGH.pdf
    snapshot_id: 3bf33edadcf6461d
    fetched_at: '2026-05-25T14:10:11Z'
    content_hash: sha256:e1c2dc1c75ddb0ee32fe5c2fb7c9bb19f1c93b48a3e26e6d63dc6e7f37c92ec0
    paragraph_quote: "(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 \n\
      Temporary 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, \naccording\
      \ 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"
    drafter_attestation: Verbatim section from snapshot 3bf33edadcf6461d; boundary human-curated + substring-verified
      (2026-07-23).
  judgment: false
