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  4. New Changes for FHA and VA Streamlines in Minnesota

Disclaimer: Beginning January 1, 2020, the VA funding fee will be changing to a range of 1.4% – 3.6% based on factors like your down payment or equity amount, your service status and whether this is a first or subsequent use of a VA loan.


Minnesota is a land of multiples: 10,000 lakes and Twin Cities. Even changes in loan programs come in twos in Minnesota, where guidelines for FHA and VA streamlines were recently revised. A streamline is a type of refinance that typically requires less in the way of documentation because you’ve already qualified for your VA or FHA loan.

These new guidelines will make getting lower mortgage insurance premiums and lower rates smooth skating for Minnesotans.

The Changes

Minnesota is an “Ability-to-Repay” state. In the past, this meant you needed full documentation to show your ability to eventually pay off the loan. Although you still need documentation, the process has been streamlined a little bit. See what I did there?

David Altesleben, FHA product manager for Quicken Loans, said that the changes are a big win for those seeking a home loan in the state.

“Minnesota residents now have a much smoother process to get approved for an FHA or VA streamline loan,” Altesleben said. “This exciting change will enable clients to take advantage of the benefits of a refinance with the added benefit of reduced documentation, making the entire process even more time efficient.”

Minnesota passed a statute in 2014 that brings its requirements for streamlines in accordance with policies established by the federal government and followed by the rest of the mortgage industry. In other words, if you have a desire to do an FHA streamline or its VA equivalent, the Interest Rate Reduction Refinance Loan, requirements in Minnesota now match national standards.

The Takeaway

We’ve talked about the changes, but what does this mean for residents of the North Star State who are looking to do these streamlines?

The big change under the new policy is that you no longer have to verify employment-related income. You’ve already qualified for your FHA or VA loan and are just looking to refinance it. You want a lower rate or a lower FHA mortgage insurance premium or VA funding fee. Maybe you want to change the loan term. The only caveat is that cash-out refinances aren’t allowed.

If you have passive income, you still have to declare this. Passive income could be anything from annuities and capital gains to Social Security and rental income. If it’s not work-related, the income is passive.

That’s the lowdown on FHA and VA streamline changes in Minnesota. Do you still have questions? You can leave us a note in the comments.

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