FHA streamline refinance: requirements, timing and how it works

Because the existing loan is already FHA-insured, HUD lets lenders skip much of the underwriting a full refinance requires. The new loan pays off the old FHA loan, and you keep one FHA mortgage with one payment.

• You apply with a lender that offers FHA streamlines and share your current mortgage statement
• The lender checks your FHA case, payment history and the timing rules
• The lender confirms the refinance meets HUD's net tangible benefit test
• On a non-credit-qualifying streamline, there is no new appraisal and no income re-verification under HUD rules
• At closing, the new FHA loan pays off the old one

These come from HUD's Single Family Housing Policy Handbook (4000.1). Lenders may set stricter rules.

• An existing FHA loan. The mortgage being refinanced must be FHA-insured and not in default.
• Seasoning. At least 210 days since the closing of the current loan, and at least six monthly payments made.
• Payment history. HUD sets limits on late payments in the months before the refinance.
• Net tangible benefit. The refinance must improve your position, for example a lower combined rate including mortgage insurance, or moving from an adjustable to a fixed rate.
• Limited cash back. Only a small amount at closing is allowed. It isn't a way to take equity out.

HUD defines two versions. The non-credit-qualifying streamline skips income verification and debt-to-income calculation. The credit-qualifying streamline reviews credit, income and assets like a standard loan, and is required for certain changes, such as removing a borrower from the loan. Many lenders also apply their own credit score minimum to both, which is why one lender may decline a streamline another would approve.

• Closing costs still apply, though they're often lower without an appraisal; HUD generally doesn't let them be added to the new loan amount, so they're paid at closing or covered by a lender credit
• A new FHA upfront mortgage insurance premium is charged, with a partial refund of the previous one if you refinance within HUD's refund window
• Annual FHA mortgage insurance continues on the new loan
• A new term can restart the clock on a loan you have been paying for years

Our refinance calculator guide shows how to test the break-even, and no-closing-cost refinance explains how lender credits work.

• You want cash. See the FHA cash-out refinance guide.
• You want to drop mortgage insurance. With improved credit and enough equity, a conventional refinance may not require it. Compare in FHA vs. conventional.
• You have a VA loan. The VA equivalent is the IRRRL; see the VA streamline refinance guide.

HUD Single Family Housing Policy Handbook 4000.1, streamline refinance section, and HUD's FHA refinance guidance for homeowners. Program rules change; your lender applies the version in force when you apply.

8Twelve is a mortgage broker, not a lender. We check whether your FHA loan meets the streamline timing and benefit rules, compare lenders in our network, and tell you if a conventional refinance or no refinance makes more sense.