The Federal Housing Administration (FHA) - which is part of HUD - insures the loan, so lender can offer you a better deal. Typically an FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low equity and you can have less-than-perfect credit. Borrowers with credit scores as low as 580 can qualify for an FHA loan. Available on 1-4 unit properties. By comparison, you’ll typically need a credit score of at least 620 to qualify for a conventional mortgage. Pre-payment penalties do not apply.
The FHA Streamline Refinance program gets its name because it allows borrowers to refinance
an existing FHA loan to a lower rate more quickly. Avoiding a lot of paperwork, and often without an
appraisal, the Streamline option saves borrowers time and money.
You can reduce the interest rate on your current mortgage without a full credit check, yet you need to have paid your mortgage on time over the last 12 months. There is no requirement for income verification either. FHA Streamline loans have reduced paperwork, simple requirements for eligibility, and a list of features which makes it very attractive for borrowers.