Streamline Your FHA Loan Refinance
April 11, 2021
How it Works
With an FHA Streamline Refinance, current FHA mortgage holders can refinance their loan without getting a second home appraisal. While most refinances require this step, the FHA allows its borrowers to skip it since the appraisal was already completed with the first mortgage. This means that a Streamline Refinance costs less and closes faster.
There is also a “non-credit qualifying refinance” where mortgage holders don’t need to requalify with an income and credit check. This is especially beneficial for FHA borrowers who have changed or lost jobs with during uncertain times.
Requirements for the FHA Streamline Refi
FHA borrowers considering a Streamline Refinance should know that there are certain requirements to qualify.
They must be current with their monthly payments. While the FHA makes some consideration for late payments, mortgage holders will need to have a history of timely mortgage payments to be eligible for the Streamline Refi. Also take note that while the FHA might make some exceptions for late payments, your lender may have their own overlays in place, and might not consider you for the refinance based on your payment history.
Eligible borrowers also need to have a well-established history of payments, similar to a credit history. They must have made at least six-monthly payments and have had their existing FHA mortgage for a minimum of 210 days to be considered for the FHA Streamline Refinance option. The FHA usually makes exceptions for this when it comes to life changes, such as divorce or inheritance.
Finally, there must be a net tangible benefit. The FHA Streamline Refinance is only approved if it makes financial sense and if there is a benefit to the borrower. This could mean a lower interest rate, a shorter loan term, or both.
What You Should Know
There are a few things to keep in mind if you are an FHA borrower considering the Streamline Refinance.
There are still closing costs that you will need to pay. The FHA does not allow financing any closing costs in the price of the loan, except the Upfront Mortgage Insurance Premium. If you are considering using gift funds or other sources, make sure you talk to your lender to get approval.
FHA guidelines limit no more than $500 cash-out with a Streamline Refinance to accommodate changes that might be made at closing. So, if you are thinking about a cash-out refinance, the FHA Streamline Refi is not the best option for you.
If you are still interested in refinancing, talk to your loan officer to see if you can use the FHA Streamline Refinance to take advantage of the falling interest rates to lower your monthly payments or shorten your mortgage term.
------------------------------
RELATED VIDEOS:
Home Equity Can Secure Your Second Mortgage
Consider the Advantages of Discount Points
FHA Limits are Calculated and Updated Annually
FHA Loan Articles
June 30, 2026FHA loans offer low down payment options and more forgiving credit requirements for borrowers who may not qualify for a conventional mortgage or need to save more money out of pocket at the front end of the mortgage. But even with more forgiving credit requirements, some borrowers are tempted to omit certain debt information from their home loan applications. What does it mean to conceal a debt or financial situation from your loan officer?
June 30, 2026Some borrowers start working on their credit scores but get impatient with the process because they can't predict when their efforts will change their FICO scores. How long does it take for your FICO scores to update when you pay off a loan, reduce your credit card balances, or take other steps to make yourself a better credit risk? The short answer is that credit reporting procedures are not standardized, and it may take more time than you realize to get those positive credit actions added to your credit report.
June 29, 2026Mortgage interest rates are "moving targets" shaped by national economic trends and the borrower's specific financial profile. What is your FHA loan interest rate? Much depends on the financial data you bring to the table. Lenders set interest rates daily based on a snapshot of market conditions, but the rate ultimately offered also reflects risk, equity, and the lending institution's internal operational costs.
June 28, 2026An FHA appraisal differs from a conventional appraisal. While the goal of a conventional appraisal centers on market value, the FHA appraisal also focuses on the buyer's safety and soundness. FHA lenders select the appraiser, not the home buyer.
June 24, 2026FHA loan closing costs vary by property price and geographic location, rather than by a single nationwide flat fee. Total settlement charges combine percentage-based fees, local government taxes, and marketplace service costs. If you are new to buying a home, you'll want to get familiar with the closing cost issues discussed here to avoid budgetary surprises later on.
