Running numbers on FHA Streamline Re-Fi for 5% on Income Prop

[Michael Zagorsky]

So my Wife and I are considering if we would qualify to do an FHA streamline re-fi on a primary residence-turned-rental located in Gardendale, AL. The house is underwater so we would not qualify to do a traditional re-fi. The home was purchased with an FHA on a 95/4.5/0.5 structure with the second mortgage being paid off. Our longer term goal has been to sell it, but we don't see that being feasible for the short term.

The original purchase price was $94k in 2009. The current remaining balance of $80k at 5%. I would guess the current FMV around $75-80k.

I was wondering if it would make sense to consider if a FHA streamlined re-fi would make sense in light despite higher MIP premiums (We currently pay a MIP of $38/mo). One thing I want to investigate is if we can bring some cash into the equation to get the MIP waved on the refi. Also, was wondering the expected cost of such a re-fi as I have not spoken to anyone yet that deals with a FHA streamline.

I'm trying to figure out if I can bring $7k to the table and get a non-MIP FHA in the ~3.75% range.