From time to time, I see a lender advertise that when you participate in the California FHA streamline program, you get to skip a payment. While this may be functionally what happens, the truth may be more accurately stated:
When you participate in the FHA streamline program, you may defer a months payment if you choose to.
Doesn’t the word skip mean the same thing as defer?
Almost, but not quite.
Skipping a payment would mean that you simply don’t pay it. Deferring a payment means that you will pay it – but you will pay it later.
When you participate in the FHA streamline program, you can defer a month’s payment. That much is true. And with the economy the way it is, many people who are doing an FHA streamline are choosing to defer a payment. Do they have to? Are they required to according to FHA guidelines? Absolutely not. You are not required to defer a payment. But in all the years that I have been doing FHA streamlines, I have yet to meet someone who didn’t want to defer one month’s mortgage payment if they had the option to.
So there you have it. Skipping a payment when you participate in the FHA streamline program isn’t an option — although deferring a payment is.
A technical point, yes.
But a very important one.
