FHA streamline refinance/12 month occupancy requirement

Recently I applied for a FHA streamline refi through my current mortgage company.  I had recently moved back into the property and had only lived there for 2 months when I applied for the refi.  

Several weeks later, I received a letter rejecting my refi request because I had not lived in my current property for more than 12 months.  During my initial call, the loan originator who took my info never told me of this requirement.  Had I known this information regarding the 12 month occupancy, I obviously would not have gone froward with the refi application nor paid the $400 nonrefundable fee.  I have now contacted the mortgage company requesting my fee refunded and I am awaiting their reply.    

Should the representative have told me of this 12 month requirement before going forward with the app and do I have a case to get back the $400 fee?  
  • August 29 2012 - US
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Answers (8)

Hi Jon - Did you ever find a lender that was able to assist you? I can do FHA streamlines on investment properties. I am licensed through the bank in all 50 states. These loans are locked and closed in 35 days or less. Only documentation needed from the borrower is and ID / Drivers License and an asset statement showing. The asset statement is to show they have the funds to establish a new escrow account and also pay the one month of interest FHA charges. Due to the FHA max mortgage calculator these are not allowed to be rolled in. No appraisal is needed on this transaction we would be using the original purchase price.  If I can be of any assistance to any please view my profile for contact information. Thank you in advance - James

  • October 17 2012
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Profile picture for Joseph Longobardi
Sometimes Representatives just don't know. Unfortunately, if this was discovered later in the process after the application then the representative really shouldn't be responsible but maybe the company themselves should refund you the money. I am not sure what the $400 upfront was for anyway though. Unless it was for an appraisal, (which streamlines don't always require), most states won't allow more than an $100 application fee upfront. So it really depends.

I know some lenders do require that 12 months of occupancy is requirement when moving back to a prior deemed "investment property". But as others have mentioned - some lenders will do streamlines on investment properties....but there are few and far between. You may not get your money back but make sure you shop around and tell them your full situation.
  • September 14 2012
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My experience has been that your application fee should be refundable if you are denied.
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Yes, that'll go through an ECOA audit unnoticed.
  • September 03 2012
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My experience has been that your application fee should be refundable if you are denied. If you walk away, then it won't. Most National Lenders do charge application fees to get a commitment and cover costs like Appraisal fees. Mortgage Banks don't charge a fee until the appraisal is ordered.

With that said: I checked our Guidelines and didn't see the 12 month rule...I will check tomorrow If you are still considering the FHA streamline.
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Ivan Diaz
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  • August 31 2012
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You can do a streamline even if it is an investment property. The bigger issue is why did you pay any money upfront? Never pay anything up front unless it is for an appraisal. Lenders who charge up front fees are scum.
  • August 30 2012
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This information was given to the loan officer.  I told him I only lived there for 2 months.  He also took my previous address for the last 2 years. 

As a sidenote, when I questioned the loan officer on why he didn't tell me of the 12 month occupancy rule, he instead asked me "why I didn't know this information?"  That did not make me a happy customer.   
  • August 30 2012
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1. You can prove you moved back in.

2. Even if you hadn''t moved back in, you can do a FHA streamline refiannce on investment properties.

  • August 30 2012
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Profile picture for wetdawgs
Was this information you volunteered when you talked to the loan officer?
  • August 29 2012
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