Effective April 18, 2011, the Federal Housing Administration (FHA), revised the underwriting requirements (rules) for the FHA streamline loan program. The most notable change is the “net tangible benefit”.
New streamline loans originated after April 18, 2011 must demonstrate a
5 percent reduction to the principal and interest of the mortgage
payment plus the annual mortgage insurance premium (MIP), or if
refinancing from an Adjustable Rate Mortgage (ARM) to a fixed rate
mortgage must either reduce the interest rate by at least 2% or be no
greater than the current interest rate.
The FHA Benefit Calculator will estimate whether the new streamline loan will meet the net tangible benefit test. Mortgagee Letter.pdf