FHA Refinance Guidelines as of January 1, 2009

The changes to FHA refinance transactions are effective January 1, 2009.

1. The max loan to value (LTV) for rate & term refinances is 97.75%

2. The max LTV for cash-out refinances is 95% for loan amounts less than the conforming limit and 85% for loan amounts at or above the conforming limit.  (Must have 12 months seasoning and no 30 day late payments on high balance loan amounts – Loan amounts determined by County).

3. Two appraisals will be required for all cash-out refinances with a LTV above 85%.

4. High balance price hits on loan balances over $417,000.

5. New or current 2nd mortgages are eligible with no maximum CLTV.

6. Loan amount for streamline refinances without an appraisal cannot exceed the original loan amount.

7. UFMIP rates: 1.75% for all rate & term and cash-out refinances and 1.5% for all streamline refinances and down payment on purchases now 3.5%

8. The FHA secure refinance is terminated.

9. Rate and term refinance – loan amount can include: closing costs, discount points, current interest, prepayment penalties, pre-paids, late charges and escrow shortages.

10. Cash back on rate & term and streamline refinances cannot exceed $500