The new FHA Streamline Refinance Program that will begin on June 11, 2012 includes a special tier of FHA PMI rates for mortgage loans that were “Endorsed by FHA on or before May 31, 2009.” But what if you bought a house in September of 2009? Or what if your loan wasn’t set up by FHA (Endorsed for Insurance) by the May 31, 2009 date? Are you just out of luck? NO! The Insurance premium, depending on what you want to do is just going to be a little higher.
If your existing FHA mortgage was endorsed by FHA on or after June 1, 2009, your new FHA PMI (or Mortgage Insurance Premium) will reflect the current PMI rates. As a point of education, there is no such “thing” as FHA PMI. FHA does issue insurance premiums that cover the lender in the event of a default. Most people “think” of that as FHA PMI – so that’s why we refer to it that way.
There are Two Charges for FHA PMI – Upfront and Annual
The Upfront charge for FHA PMI changed on April 1, 2013, and so for the FHA Borrowers with loans endorsed on or after June 1, 2009, FHA Upfront PMI charges will be equal to 1.75 percent of your loan size. So, if your current balance is $100,000, then your upfront mortgage insurance charges will be $1,750. This part of the FHA PMI program will be added to your balance. So, again, if you currently owe $100,000 – your new balance will be $101,750.
This is the amount the FHA Streamline Refinance payments will be calculated on.
Accurate Information! Other websites on this topic are suggesting that you might be eligible for a refund of your previous FHA Upfront PMI Charges. The guideline states that if you received your FHA Mortgage after December 9, 2004 – you could be due a refund. There’s a loop hole in that statement… it’s only for FHA refinances of those loan made during the first 3 years (read more).
If you do a FHA Streamline Refinance, on a loan that was endorsed AFTER June 1, 2009, and it has NOT been more than 3 years, then you might get a slight refund. In many cases, that refund will be deducted from the loan balance. It’s up to your current mortgage holder. Let’s say your loan was endorsed by FHA on July 1, 2009 – and you want to do a FHA Streamline Refinance that closes June, 2012. As long as it closes prior to July 1, 2009 (3 year mark) – you are due a slight refund of the Upfront Premium you’ve already paid. In this case – being 3 full years, you would get a refund equal to 10% of the original Upfront Premium you paid.
For FHA Case Numbers assigned after April 1, 2013, as a FHA Streamline Refinance – and the loan we are refinancing was endorsed on or after June 1, 2009, here are the FHA annual premiums for 30 year loans (call us and we will go over 15 year loan terms)
- 30-year loan terms with loan-to-value over 95% : 1.35 percent for Annual FHA PMI / again there’s also an upfront fee of 1.75% of the loan amount added to the loan for the initial FHA PMI Premium
- 30-year loan terms with loan-to-value under 95% : 1.30 percent for Annual FHA PMI / again there’s also an upfront fee of 1.75% of the loan amount added to the loan for the initial FHA PMI Premium
If you are in a FHA High Cost Area, and you have a mortgage over $625,500 – there are new charges going into effect that will add an additional .25 percent to your annual FHA PMI fees. (doesn’t apply to most of North Carolina).
Important FHA Streamline Refinance Details To Remember
- FHA Has a Net Tangible Benefit requirement. You must lower your monthly payment by at 5 percent to qualify for the FHA Streamline Refinance.
- FHA has different requirements for a FHA Streamline Refinance WITH an Appraisal, and for those WITHOUT an Appraisal.
- You must be current on your mortgage, and at least 6 payments must have been made. In general, this is a program for people who are not having problems making their mortgage payments, they just want a lower interest rate.
If you have questions about getting a FHA Streamline Refinance with no appraisal on a mortgage “endorsed” after May 31, 2009 – call us! There are tons of options to help you get your payments lower in North Carolina! Steve Thorne 919 649 5058.
Eleanor,
How long did HUD have to endorse a loan in 2009? I closed in April and the loan was not endorsed until June3, 2009 but HUD received over 5.000 dollars at settlement for the PMI. How are they able to take a premium without servicing or endorsing a loan?
Don
There’s not a good answer for those folks who closed, but did not make the endorsement date, unfortunately. I don’t know of a solution, although you might want to call The National Servicing Center (877)622-8525
I am in the same boat as Don, we closed on 5/14/2009 and I paid $3,917 in MIP, but I was not endorsed until 6/25. It would seem to me they would have to retroactively record the endorsement date to the close date.
I had someone contact their Congressman to see if it could be changed? I would tell you, that it might still be worth it to refinance. If you are in NC, let us put you on a ‘watch list” – when rates get to “your” number, we can contact you!
Same boat as you guys… I closed in MARCH and didn’t get endorsed until June 2nd. The difference in what to bring to the table and the PMI rate makes the “backup” plan untenable. I’m pretty pissed about this, they had a FULL TWO MONTHS to endorse this loan. It’s amazing how we’re still being screwed…
Nick – the really really good news is that rates are continuing to go down! It might be worth it before this is all over! Have you talked to a loan officer and run the numbers??
WHAT LOAN OFFICER CLOSED A FHA REFINANCE IN MAY OF 2012 that qualified for the new program??? The program was ANNOUNCED in March! I would be FURIOUS! You need to climb a ladder and see if they will re-close it prior to sending the paperwork to FHA for the Endorsement! WOW! That’s pretty negligent!
okay here is the scenario: financed an FHA loan in 2006, just did a streamline that closed at end of May 2012 with the higher MIP……..Since I closed about a month before this announcement, am I stuck with the new higher MIP or are there any options?
Will they extend the May 31 st deadline? Maybe give a few more months after that date? Im in California and closed in Nov 09.
No – it does not look like that deadline will be extended. Sorry!
well i closed on my house in may of 2009 and my loan wasn’t endorsed until September 16th 2009… 4 months later.. I needed this refinance, and now i’m going to have to walk away from my house that i have put everything I have into. Gotta love these bull shit rules. Why did it take 4 months for my loan to be endorsed, and why would i have to pay the mpi fees if i wasnt technically even a part of that program?
Eleanor,
I read above that to do this streamline, there is virtually no verification requirements for income, assets, employment etc… Does that mean I can fill out a loan app, then go to closing? Are there any Lender gotchas? What will you require me to disclose/provide above the FHA mininum requirements to insure the loan?
I’m going to write a blog post in a minute to answer your question – I’ll attach a link. Thanks!
I’m sorry someone took your loan application without looking in the FHA System… it’s all right there for us to see what day it was endorsed. Have you asked how much it will save you WITHOUT the lower PMI? Might still be worth it.
Closed my refi on an FHA mortgage in March of 2009 nearly $9k in upfront premiums were collected at closing, made my first mortgage payment on this new loan May 1, 2009. Was told I could refi under the new program with a lower pmi, had all the title work done, was trying to close at the end of this month and just got notification Monday that my 2009 refi wasn’t endorsed by HUD until June 4, 2009. Am I stuck paying for all this title work?…Lender is telling to me to wait and see if the FHA does something about this for me and hundreds of other homeowners in the same boat. Meanwhile I could have been saving $600 a month and I guess I’m now stuck paying for title work for nothing, what recourse do we have? ANYTHING?!!!?!!!!
So my fha loan was refinanced after june 2009 what options are available for me I already have a 5% fixed rate but I would obviously like something lower.
Pablo – depending on your credit rating, and the gap between what you owe on the home and what it is valued at – you might qualify for a Conventional refinance.
Hello Eleanor. I a in the process of refinancing my home. When I first purchased my home, I paid no money out of pocket. Now I am hearing that I have to pay 2000.00 out o fpocket expences. When asked what the money is for, I was told that it is to pay my new escrow account and get it current. Is that right? Please let me know.
Kindra – there are 2 ways to do the refinance. In NC, we have been Billed for our 2012 taxes, and they will be paid in September. Because of this, your lender may be structuring the loan so that you are paying for your new escrow account, and then in a few weeks, your current mortgage holder will reimburse you for the funds you have in that account. The other way to do it would be to have a slightly higher interest rate – and ask the new mortgage holder to pay most of the escrows too.
Richard – you can still do a FHA Streamline Refinance with no Appraisal. It just doesn’t have as MUCH savings because the Current FHA PMI is higher – but you can still do it! 🙂
I have been hearing about options for people on FHA loans in homes that are worth less than what they owe on them now are able to refinance the house at the price of the current value without paying the difference? Is this true? My home lost 50K in value since I purchased it in October of 2009…it was worth 165k at that time. Now I am completely upside down in my new home. I can afford the payments just fine but am now in a need to sell the home to move closer to a new job? What are MY options?
We bought our house in 2010 at 4.625% rate, we keep hearing all these stores from friends/family who have re-fi’d. Would an FHA streamline be worth it for us? We are mainly just looking to lower our monthly payment.
Thanks,
Mem,
What will be my rate with no point. I have FHA loan. I refinanced 2003.
Put question and answer, Hope he you will get answers.
make good comments for me , Which will be helpful,
(1) Are you employed, self-employed or retired?
Ans: I am working as Civil Engineer Sr. in Government
(2) Current mortgage balance(s)?
Ans: Current Morgage blances is $103,085.00. approx.
There is no 2nd mortgage.
(3) Estimate of taxes and insurance per year?
Ans:Escrow+MIP+Conty TAX, $235+$47.13+$1300
(4) Type of property (i.e., manufactured, condo, single family residence, etc)?
Ans:Ranch, single family
(5) What is your credit score?
Credit scores: 950 to 775
(6) Requested loan term (i.e., 15 year, 30 year, etc.)
Ans: 30 years
(7) Would you like cash out? How much?
Ans: No
(8) Primary, second, or investment property?
Ans.Primary.
(9). Is your current loan an FHA loan? Ans: yes
,
10) What month and year did you get your current loan? 2001, I refinanced 2003
11) What is your current interest rate? Ans: 6 %
(12) What is your current P&I payment (principle & interest)? Ans: $975.11
(13) What is the address:
Sincerely,
Hassan
Thank you for contacting us – our team is responding to you via personal email, or you can call us at 919 649 5058
Eleanor: I live in FL. Got any suggestions for someone I can contact here? Our endorsement date is after June 2009. I contacted BOA, but they said our mortagage ins rate would double so it would be a moot point. So here again we pay our bills and can’t catch a break on the interest rate. 🙁 Would really appreciate some feedback.
Okay – well the person I would suggest you speak with is Chris Brown, he’s in Orlando – you can find him at MortgageChiliBlog.com – have you looked to see if Fannie or Freddie have your mortgage? It looks like there’s a HARP 3 in the works, and that could be the ticket for all of this. If the loan is owned by them, when Congress comes back into session (Nov) then they are going to try and address it with the new HARP program.
Kat – there’s a push in Congress to come up with a way for folks who have not yet been able to refinance to be able to do so… but Congress will not be back into session until after the Election. The thing to remember is that you are under 24 months of having MIP/PMI at all on your FHA loan – so no, for $50 to $60 bucks I probably would advise you not to pursue it. If rates go lower (I personally hope they don’t because then the Economy would surely be in trouble) then maybe at the $75 a month break I’d look at it. Hope that helps!
Eleanor, I live in Georgia. I closed on my home June 5, 2009. My loan was endorsed August 5, 2009. It doesn’t seem to be worth rolling more money into my loan in order to do an FHA Streamline Refi because the MIP has gone up.
It seems that every program that has come along leaves me high and dry due to some percentage or date stipulation. I have done everything right, made payments on time, not foreclosed, short-saled or worse yet, walked away. Yet, there seems to be no relief for me. Any suggestions? Do you think that I should still pursue a streamline refi even if it lowers my payments by $50 – $60/month? (note: this meets the 5% requirement)
Or, do you think there will be a day in the near future when they lower the MIP again or push the endorsement date out? I am so dissapointed because I’ve done everything I could to keep up with these changes. Now, upon seeing that interest rates keep dropping, I check into this and find that I lost out on the window of opportunity because of my endorsement date and the fact that I didn’t refi sooner this year (which still would have helped more than now that MIP rates have soared). My question is why didn’t I receive some sort of letter that I was a good candidate for this from my lender? I have several friends who did. I am business/financial saavy, and still feel left out in the cold at every turn. Suggestions?
Hey Eleanor never saw a response to my earlier post… so gonna try again:
We bought our house in 2010 at 4.625% rate, we keep hearing all these stores from friends/family who have re-fi’d. Would an FHA streamline be worth it for us? We are mainly just looking to lower our monthly payment. We asked a family friend who deals with loans and his response was “borderline”. Let me know if you need any more info.
Thanks,
Eleanor, yes that did help. I wasn’t keeping in mind the eradication of MIP/PMI after 5 years. You’re right, I’m on the downhill slide to shed that MIP payment. If I refinance, I would have to push out for another 5 years, correct? I hope I’m understanding you. Of course, by that time there will probably be a change in that regard also, lol! Just a little humor to relieve tension. I do realize that dropping the MIP/PMI after 5 years (or at a certain LTV for PMI) is a set thing which has stood the test of time. It’s just these days it’s difficult not to be a bit negative for those of us who have not jumped ship, but seem to get no relief valve whereever we turn. Thank you for responding so quickly! If Romney wins the election, I imagine interest rates will begin easing back up (not being critical, just seems to be the case with more conservative administrations). And, then I will probably not want to refinance anyway. So, I will look forward to the day I can drop the MIP!
Eleanor: Thanks for the info about Chris Brown. I think it’s best we sit tight. Our mortgage is backed through Jennie Mae. Hence, we don’t qualify for ANY of these programs without being punished by paying nearly DOUBLE our MIP. All that aside, we’re super blessed to have jobs and a 5% interest rate. So, all in all . . . I can’t really complain. 🙂 I’ve set your site to send me emails so, I’ll be sure to check back! Thanks, again!
Thanks! I think it’s a pretty good rate too – plus, you are going to have the MIP going AWAY in a few more months!
Yes, Kat – you are right – the FHA Mortgage Insurance is for 60 months – so if you refinance, it will just start that meter over. 🙂
I am so sorry if I missed this! I am assuming you got the 4.625% with an FHA mortgage – at this time, I don’t think it’s to your benefit to refinance.
HI Eleanor,
I have an FHA mortgage at an interest rate of 5.75%. I closed on my mortgage in April 2010. When I took out the mortgage, I participated in a program that was financed through NCHFA’s down-payment assistance program that offered $14,900 towards my down payment because the home that I purchased was a foreclosure. The $14,900 is forgivable after 5 years and is currently positioned as subordinate financing.
The appraisal came in at 95k and I currently owe about $75,000 on my first and the subordinate lien is down to $8940. I’m interested in the streamline refinance, however, I am not sure: 1. if I am eligible 2. If I will be able to subordinate my 2nd, 3. if I will be able to use the purchase price or old appraisal as my homes value so that I will be under 80% LTV on my first and avoid paying MIP.
My current P&I payment is $451.28. If I could refi down to 3.75%, I know it would save me over $100/mth. Just trying to find out what my options are. Any feedback would be appreciated.
Okay – the first thing to remember is that an FHA Streamline means you are going from one FHA loan to another – so you don’t really have a loan to value issue with that, and there’s no way to avoid the PMI.
Second, FHA changed it’s PMI rates this spring – so just lowering the P&I is not enough to see a real difference (refinance justification) if your FHA PMI payments are going to increase by an appreciable amount. I’m not near a calculator, but you can call us directly and we’ll run the numbers for you to see if it makes sense… it might. 919 649 5058
The good news is that rates ARE really, really low, and NCHFA will normally re-subordinate to allow the first to refinance.
I purhcased a home on April 9, 2009; however, the loan was not endorsed until June 30th, so I do not quality for the streamline refinance. I saw that a large bank had an FHA ARM that would save me about $200 per month after the increase in my PMI payments. I contacted a loan officer at this bank who instructed me to wait until the end of the year because he has heard the FHA may extend the endorsement date on loans for the streamline. I don’t want to miss out on this really low ARM rate, but also would hate to refinance and miss out on a lower rate and the same PMI I am currently paying, which would mean even bigger savings. I know that initally you said there were no plans to extend the endorsement date, but I was wondering if you have heard anything different recently. Just don’t want to refinance if there’s no chance of the endorsement date extension.
Last sentence should have said “don’t want to wait to refinance…”
It’s okay – I wouldn’t want to wait to refinance either! I have heard the rumor that the date might be extended… however, I don’t think you are in THAT big of a risk of really high rates on short term (ARMs). It’s probably worth the gamble to wait until the end of the year – if you want to call us at 919 649 5058, we will be glad to run a scenario for you 🙂
I have an FHA loan endorsed June 22, 2009, but I want to refinance into a lower rate. My current rate is 5.5%, but with this MIP increase it’s making it difficult for me to get a really low rate to off-set the difference. If I refinance does that mean the MIP will never go away; that I have keep that for the life of the loan or unless I refinance conventionally? The county assessment has dropped the value of my home for the 3rd time leaving me with no alternative, but to do a streamline. I would even was considering a 15 year, but again I need an extremely low rate in order to do that. I have excellent credit, but I don’t think my house will appraise for the right price. I don’t want a fixed rate not an ARM, those are too risky for me. Do you have any advice for me?
I meant to say I want a fixed rate, not an ARM (too risky for me).
Yes – if you refinance AFTER June 3 (so basically after May) then the FHA PMI will stay on the loan for the life of the loan. Streamline seems like the only option – I understand the FHA PMI rate will make it a difficult move, so sorry.
My daughter closed on her FHA loan on December 30, 2008. She has been told it was not endorsed until June 3,2009. Too late for streamline. Seems odd that loans closed in march 2009 also have a June 3 endorsement as I see my the above posts. Maybe they delayed these endorsements to reduce the number of those who qualified for streamline?
Eleanor, Reading through all your comments helps me see how I am in the boat with many others as far as closing before June 1st but having an after June 1st endorsement date. I have looked into it and for us it isn’t practical to refinance at the higher MIP. I have written to Richard Burr and been contacted by his office, and I also contacted another NC Local official(cant remember who right now) and they did seem in interested in my scenario. Burr’s office in DC said they would be happy to have him look at my letter, however they just weren’t sure that anything could be done. Have you heard of any updated happenings between the harp 3.0 idea and/or changes in the fha streamline? (also If you would like I wouldn’t mind sharing my letter with you, for “mass” distribution to our NC leaders. Maybe if enough are sent out , we can get some attention/swift action)
I have not heard of any updates, unfortunately. If you will send me the letter – I’ll be glad to publish it and promote it 🙂 I think it’s a great idea!
Here’s the most recent update I’ve heard about this – IF Mel Watt D-NC is accepted as the new head of the FHFA this summer, he apparently wants the date pushed back to May 2010! https://ncfhaexpert.com/fha/could-the-new-fhfa-head-change-fha-pmi-endorsement-date/