Refinance Options for Homeowners
PHFA offers the following Refinance loan programs for existing homeowners. What you choose will depend on your individual situation.
The Pennsylvania Housing Finance agency offers a conventional loan product that is designed specifically for HFAs (Housing Finance Agencies). This product offers a fully amortized 30 year fixed rate term. PHFA offers this program through a network of approved participating lenders, with PHFA as the servicer. In other words, you will work with a lender up through the loan closing, but will make your monthly payments to PHFA for the life of your loan.
HFA Preferred™(Lo MI)
With the HFA Preferred™(Lo MI) loan, mortgage insurance is provided by one of several private mortgage insurance companies when the borrower puts down less than 20 percent (20 %) towards the purchase of the home. Your lender will help you determine what the premium will cost for your specific situation.
- The household income cannot exceed the B. Limits - HFA PreferredTM. The gross annual household income for all adults that intend to occupy the home within one year from loan closing cannot exceed the limit shown for your county. All sources of income must be included, except for income received by persons under age 18 and income received by dependents enrolled in a full-time undergraduate program.
- The loan must be used towards the purchase or refinance of a primary residence.
- There is no first time homebuyer requirement under this program. The borrower may have an ownership interest in another residential dwelling at the time of loan closing.
- Borrowers are required to put down at least $1,000 from their own funds. The remaining funds can be from an acceptable gift or assistance program.
- Acceptable credit history and the ability to make monthly payments on the home are required. Generally, you should plan to use no more than 30 percent (30 %) of your income for your monthly mortgage payment. A participating lender or PHFA network counseling agency can help you determine how much of a home you can afford, as well as any credit issues you may need to work on.
- Sufficient funds are necessary to pay standard mortgage application and closing fees. Check with a PHFA participating lender to determine the specific costs. These would commonly include such things as credit reports, appraisals, title fees, transfer taxes, etc.
- Mortgage loans for two-unit properties are not permitted under this program. Check out the Keystone Home and Keystone Government Home Purchase Loan programs if you are interested in purchasing one of these types of properties.
FHA Streamline Refinance
The FHA Streamline Refinance loan product allows eligible homeowners to refinance their existing FHA loan to reduce their current monthly mortgage payment. The new loan can only include the outstanding principal balance minus any applicable refund of the Upfront Front Mortgage Insurance Premium (UFMIP) plus the new UFMIP, up to a maximum amount of 97.75% of the original appraised value. Cash back to the borrower is not permitted. Any and all subordinate loans must be re-subordinated or paid off by the borrower; they cannot be paid off with the new loan. A copy of your repayment history verifying timely mortgage payments will be required.
VA Interest Rate Reduction Refinancing Loan (IRRRL)
The VA Interest Rate Reduction Refinancing Loan (IRRRL) allows eligible veteran-homeowners to refinance their existing VA-guaranteed loan to a lower interest rate and reduce their current monthly mortgage payment. The new loan can only include the existing VA loan balance, allowable fees and charges, up to two discount points, and the VA funding fee. Cash back to the borrower is not permitted. Any and all subordinate loans must be re-subordinated or paid off by the borrower; they cannot be paid off with the new loan.
With the Keystone Flex Loan Program, refinancing options are available for homeowners looking to obtain a lower rate through Conventional, FHA or VA financing. This product offers a fully amortized 30-year fixed rate term. For conventional refinancing, the loan to value (LTV) amount cannot exceed 97%. FHA refinancing LTV limit is 97.75% and VA refinancing is 100%. Maximum cash out refinances are available up to $10,000 for all approved loan types. For limited cash out refinancing, there is a maximum amount of $500 for FHA loans and the lesser of 2% or $2,000 for conventional loans. Limited cash out refinancing is not available for VA loans.
- The qualifying income and loan amount cannot exceed the limits for the Keystone Flex Loan Program.
- The loan must be used toward the refinance of a primary residence.
- Acceptable credit history and the ability to make monthly payments on the home are required. A participating lender can help you determine.
- Refinance for one or two-unit properties are permitted under this program.
How to Apply: If you meet the conditions above, contact a PHFA participating lender to start your refinance mortgage application.