Cash Out Refinancing

• The U.S. Department of Housing and Urban Development offers several refinancing options under the Federal Housing Administration. These include Cash Out Refinancing and Streamlined Refinancing. The Cash Out option allows homeowners to obtain money back after financing. This option is ideal for homeowners whose property value has increased since the purchase of the home and provides the homeowner access to his or her equity, allowing the owner to refinance, pay off their first mortgage and use the balance of the loan as needed. FHA allows you to refinance up to 85 percent of the home's appraised value plus the closing costs. The previous 95 percent value was reduced effective April 1, 2009.
  
  

Streamlined Refinancing

• The Streamlined Refinancing option is structured to help the homeowner reduce their interest rate. FHA Streamlined Refinancing is available to homeowners who purchased their homes with FHA loans, as well as those who have purchased with conventional loans. The original mortgage loan must be in good standing and the refinanced interest rate must reduce the monthly interest payments. This refinancing option does not allow homeowners to obtain cash back from the completed process. However, FHA Streamlined Refinancing does include timesaving procedures for those with current FHA mortgages. An FHA homeowner who refinances with the FHA Streamlined Refinance option is not subject to appraisals, credit underwriting, qualifying debt ratios, credit checks, income verification or in-person application requirements. The homeowner must have owned the property for at least six months. Those with conventional loans are subject to the standard credit check, verifications and income requirements.
  
  

Streamlined 203(k) Loan

• The Streamlined option also includes the FHA Streamline 203(k) Loan. This loan can only be taken to make home modifications and improvements. The minimum amount is $5,000 with a maximum of $35,000. The approved home modifications do not include major alterations and the work must include at least one contractor. The loan requires that the contractors meet FHA contractor guidelines and provide detailed estimates for each phase of the project. Improvements that total more than $15,000 require a third party inspection. 203(k) loans are not completed until the work has been completed. You may be required to provide inspection reports, change orders, escrow fund analysis reports and record disbursements to meet the closing requirements of the loan.