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What is an FHA Streamline Refinance?

An FHA streamline refinance replaces your existing FHA mortgage loan with a new loan with better loan terms. As the name suggests, the process is streamlined, requiring less paperwork and conditions for a speedy refinance. They do not require a credit check, home appraisal, income verification, or money out of pocket. Streamline refinancing is available on all government-backed home loans such as FHA, VA, and USDA loans.

FHA Streamline Loan Requirements

To be eligible, you must be current on your mortgage payments and have no late payments within the past twelve months. There is a 210-day waiting period from when you closed on your mortgage to be eligible.

Criteria to qualify for an FHA streamline refinance

  • 580+ credit score (some mortgage lenders don’t check credit)
  • Must have an existing FHA loan
  • 210 day waiting period since closing
  • No late mortgage payments in the past 12 months
  • Refinancing must produce a net tangible benefit


FHA Streamline Refinance Waiting Period

  • Must make at least six on-time mortgage payments since closing on the mortgage
  • Must be 210 days since your FHA loan closed
  • Cannot refinance before the 6 month anniversary of your first mortgage payment


FHA Streamline Refinance Infographic

FHA Streamline Refinance Infographic

FHA Streamline Refinance Benefits

  • A home appraisal is not required
  • Lower your monthly payment
  • No income verification
  • Minimal documentation required
  • Quick and easy process
  • Lower your interest and MIP rates
  • Lower your mortgage insurance rate
  • No loan-to-value limits (You can be underwater on your mortgage)


How to Qualify


The FHA does not require lenders to perform a credit check for a streamline refinance. However, some lenders set their own minimum credit requirements and will check your credit report and scores.

You must be current on your FHA loan and have no late mortgage payments in the last six months. Because credit requirements on FHA streamline refinancing depend on the lender, you should try different lenders until you find a lender that can approve you.

Loan-to-Value Ratio

There is no maximum loan-to-value ratio borrowers who owe more on the home than it is worth can still qualify.

If you owe more on your mortgage than your home is worth (loan-to-value ratio above 100%), you still may qualify for an FHA streamline refinance that is great for borrowers with little to no equity to refinance their loan.

Debt-to-Income Ratio

Mortgage lenders do not need to verify a borrower’s income or employment to be eligible. You can qualify for a streamline refinance regarless of your income level.

Closing Costs

The one drawback of using an FHA streamline refinance is the closing costs, which can range between 2%-5% of the loan amount. The amount varies due to the size of the loan and the lender you use.

It’s a good idea to get loan quotes from at least three lenders to compare closing costs, interest rates, and other fees to ensure you’re getting competitive loan terms.

FHA Cash-Out Refinance

Borrowers with a 620 credit core who want to tap into their home equity to get cash can borrow up to 80% of the market value of the home.

FHA cash-out refinancing is for homeowners with significant equity in their home who want to convert their equity into cash.  FHA cash-out refinances require a home appraisal, credit check, income verification, and a maximum debt-to-income ratio of 50%.

FHA to Conventional Refinance

FHA borrowers with more than 20% equity can drop their mortgage insurance premiums by refinancing their FHA loan into a conventional loan. Conventional mortgages do not require PMI on mortgages with a loan-to-value ratio of less than 80%.

Conventional loans do have more stringent requirements than FHA. For one, you will need a minimum credit score of 620 and a maximum 43% debt-to-income ratio. You will have to prove your income using W2s, tax returns, and paycheck stubs. If you’re able to meet the requirements, a conventional loan will be a cheaper option than FHA.

Refinance to Lower the Mortgage Insurance Premium

Many FHA borrowers are required to pay MIP for the life of the loan with an FHA-insured mortgage. The MIP fee was lowered to 0.85% in 2015. So if you closed on your FHA mortgage before 2015 a streamline refinance will reduce your MIP rate by 0.50%, or $500 per year for every $100,000 financned.

• Down payment of 10% or more MIP duration is 11 years 

• Down payment of less than 10% MIP is required for the life of the loan

If you have an FHA loan and have more than a 20% equity stake in your property. You can avoid paying PMI by refinancing into a conventional loan. Conventional loans do not require PMI on mortgages with an LTV ratio of 78% or less.

Upfront Mortgage Insurance Premium Refund

The current upfront mortgage insurance premium is 1.75 basis points or 1.75%. This is a fee you will pay upfront; however, you must not pay in cash; it can be added to your loan. A refund on the original upfront MIP payment if you got your FHA loan less than 3 years ago.

If you refinance your FHA loan within 36 months of closing, you may be due a refund on the portion of the up-front MIP paid. The MIP refund amount will depend on how long you have had your FHA mortgage. You’ll need to speak to an FHA lender about how much of a refund you may be due.

When an FHA Streamline Refinance is a Good Idea

A streamline refinance is a good option if

  • Your interest rate is higher than the current rates available
  • Your mortgage insurance premium  is higher than 0.85%
  • If your home’s value has decreased
  • You are struggling to make your mortgage payments.
  • You are underwater on your home


Frequently Asked Questions

What is an FHA streamline refinance?

If you have an FHA loan, you can be eligible for a streamline refinance 210 days after closing. They allow borrowers to refinance to a lower interest rate without requiring a credit check or income verification, making the process quick and easy.

Is an FHA streamline refinance a good idea?

If your interest rate is higher than current rates, you can reduce the amount of interest you pay and lower your monthly payment with a streamline refinance.

Who does FHA streamline refinancing?

You can speak to your current lender about an FHA streamline refinance or any FHA-approved lender. You should always compare rates and lender fees with 3-4 lenders before making a decision.

How long does it take to close on an FHA streamline refinance?

The average time it takes to complete a streamline refinance is 30-45 days. You can speed the process up by providing any documents to your loan officer as quickly as possible.

Do I have to pay closing costs on an FHA Streamline Refinance?

Yes. Closing costs on a streamline refinance are between 2%-5% of the loan amount, depending on your credit score and the lender you choose. These costs cannot be rolled into the loan.

What documents do I need for an FHA Streamline Refinance?

It’s called a streamline refinance because the process is streamlined, requiring less documentation than standard mortgages.

Documents needed:

  • The loan application
  • Mortgage statement showing you are current and have made on-time payments for the last 6 months
  • Employer information (Employment may be verified, income will not)
  • Bank statements showing you have funds to cover upfront costs
  • Utility bills in your name at the property address to show it’s your primary residence


The Bottom Line

FHA streamline refinancing is a quick and easy way for FHA borrowers to take advantage of these historically low-interest rates and lower their monthly mortgage payments.

FHA Streamline Refinance Overview

  • Lower your mortgage rate and monthly payment
  • No income verification
  • No credit check requirement
  • Limited documentation needed
  • 210 waiting day period
  • Quick and easy process


Is your rate above 4.5%? If so, you should see how much you could save by refinancing your FHA loan with a streamline refinance.

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