Appraising Refinances

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Chapter 1
Appraisal & Property Requirements
Page 1-04

Definitions of both Refinances and Streamline Refinances can be found in HUD Handbook 4155.1 REV-4 CHG 1, Chapter 1, Section 4.

A. Appraising Refinances - A standard refinance requires a complete appraisal with all appropriate repair/conditions noted, while a streamline refinance may be insured with or without an appraisal.

B. Streamline Refinance - Streamline refinances are designed to lower the monthly principal and interest payments on a CURRENT FHA-insured mortgage and must involve no cash back to the borrower except for minor adjustments at closing not to exceed $500.00.

Streamline refinances can be insured with or without an appraisal. When an appraisal is completed FHA does not require the repairs (except for lead based paint repairs) to be completed, however the lender may require completion of repairs as a condition of the appraisal.

If the lender is required by law or banking regulations (e.g., FIRREA) or its investors to obtain an appraisal on a mortgage that will be processed as if no appraisal was made, the appraisal fee may be paid by the borrower, out-of-pocket (i.e., not financed).

Reference: Handbook 4155.1, Rev. 4 Chapter 1, and Mortgagee Letter 1996-10.