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10 Best FHA Streamline Refinance Lenders of 2020

NerdWalletOctober 8, 2020

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An FHA streamline refinance puts fewer hurdles between you and a lower monthly FHA loan payment. Use our list to compare top FHA streamline refinance lenders across several categories.

An FHA streamline refinance is a faster way to get a better deal on your Federal Housing Administration-backed mortgage. You won't have to get a new FHA appraisal, and with a non-credit-qualifying streamline refinance, you can skip the credit check, too.

Not all FHA streamline refinance lenders are the same. Lenders can add their own additional requirements to FHA loans, including a higher minimum credit score, and origination fees can vary as well.

Take a look at some of NerdWallet's picks for top FHA streamline refinance lenders to find strong options across several categories.

Summary of Best FHA Streamline Refinance Lenders of 2020

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at Quicken Loans

Quicken Loans: NMLS#3030

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Min. Credit Score

620

Min. Down Payment

3%

at Quicken Loans


Why we like it

Good for: borrowers looking for just about all of the services your neighborhood lender does — with online convenience.

Pros

  • Quicken Loans couples a fully online application with available mortgage advisors for those who want a human touch.

  • Instantly verifies employment and income for many working Americans.

  • Offers custom fixed-rate loan terms that are between eight and 30 years.

  • Provides a wide variety of loan types, including renovation loans and all government-backed mortgage products.

Cons

  • Quicken Loans doesn't offer home equity loans or HELOCs.

  • Quicken's lender fees can be stout and they don't offset those fees with particularly low mortgage rates.

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at loanDepot

loanDepot: NMLS#174457

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Min. Credit Score

620

Min. Down Payment

5%

at loanDepot


Why we like it

Ideal for borrowers looking to get a mortgage with help from a loan officer. Digital back-office operations are said to add efficiency to the loan process.

Pros

  • Offers digital income, asset and employment verification.

  • Offers multiple renovation loan options.

  • Has over 200 affiliated loan stores nationwide for customers who prefer face-to-face service.

Cons

  • Mortgage rates aren't available online; you'll need to contact a loan officer.

  • Does not offer home equity loans or lines of credit.

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at Veterans United

Veterans United: NMLS#1907

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Min. Credit Score

660

Min. Down Payment

0%

at Veterans United


Why we like it

Good for: veterans, active-duty service members and eligible Reservists looking for VA or non-VA loans.

Pros

  • Offers 24/7 customer service over the phone.

  • Has online application and pre-qualification.

  • Offers a free credit counseling service.

  • Employs advisors from each branch of the armed forces.

Cons

  • Doesn’t offer home equity loans or HELOCs.

  • Veterans United has physical branch offices in only 18 states.

  • Information on FHA, USDA and conventional loans is harder to find on their website.

  • Charges higher rates and fees than some other lenders.

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at Guaranteed Rate

Guaranteed Rate: NMLS#2611

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Min. Credit Score

620

Min. Down Payment

3%

at Guaranteed Rate


Why we like it

Good for borrowers seeking conventional or government-backed loans, and a totally online experience.

Pros

  • Offers the ability to securely upload and digitally sign loan documents.

  • Displays detailed sample rates for many of its loan products.

Cons

  • Doesn't offer home equity loans or lines of credit.

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Alterra: NMLS#133739

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Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Good for: first-time home buyers and those with nontraditional incomes.

Pros

  • Offers an ITIN qualification path for undocumented borrowers.

  • Has a digital application process.

  • Offers several mortgage options for low- to moderate-income borrowers.

  • Borrowers can qualify with income from self-employment and other nontraditional sources.

Cons

  • No mortgage rates published online.

  • No home equity loans or lines of credit.

  • Generally has higher rates and fees than other lenders.

  • Branch offices not available in all states.

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HomeBridge: NMLS#6521

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Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Good for borrowers who want a loan officer's help, in person or on the phone, when deciding among the wide range of available mortgage options — including loans to buy and renovate.

Pros

  • Offers a full array of mortgage products, including government and renovation loans.

  • Has loans for most purposes, including purchase, refinance and jumbo mortgages.

  • Online portal keeps borrowers up-to-date on the loan application's progress.

Cons

  • Doesn't post interest rates on its site.

  • Doesn’t offer home equity loans or lines of credit.

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PennyMac: NMLS#35953

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Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Ideal for borrowers who want plenty of loan options, as well as advice and help over the phone. PennyMac offers a variety of mortgage types, boasts of its employees' communication skills and services its own loans.

Pros

  • Provides a single point of contact during loan processing.

  • Customized rate estimates are available before registering.

  • Electronic document submissions and online updates.

  • Services its loans after closing.

Cons

  • Mobile app is only for current borrowers and can't be used to apply for a new loan.

  • No retail branches.

  • Charges an origination fee, which it says is typically $1,100.

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Carrington: NMLS#2600

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Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Good for: first-time home buyers or credit-challenged borrowers interested in government loan products.

Pros

  • Offers multiple low-down-payment loan programs.

  • May consider alternative credit data, like bank statements and rent payments.

Cons

  • To get sample rates, you'll have to speak with a loan officer.

  • Doesn't offer home equity loans or HELOC.

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Bank of America: NMLS#399802

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Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Ideal for borrowers who prefer a traditional bank. Bank of America offers a wide array of mortgages and online account management tools. It also has first-time home buyer loans with low down payments and no mandatory mortgage insurance.

Pros

  • Allows borrowers to apply entirely online.

  • Offers down payment and closing cost assistance programs.

  • May give existing customers a discount on mortgage lender origination fees.

Cons

  • Does not offer renovation loans.

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BB&T: NMLS#399803

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Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Good for borrowers in the Southeast who want online tools with the option of face-to-face service. BB&T, now part of Truist Financial Corp., offers a full menu of home loans.

Pros

  • Offers a variety of low-down-payment mortgages as well as construction mortgages.

  • Website lets users estimate rates online by loan and property type, amount and location.

  • Has an online mortgage application.

Cons

  • Branches limited mostly to the Southeast region.

  • Does not offer FHA loans.

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FHA streamline refinance FAQ

What is an FHA streamline refinance?

An FHA streamline refinance involves replacing an FHA-insured mortgage with another FHA loan that has a lower interest rate, shorter term or both. It’s streamlined because the new loan doesn’t require an FHA appraisal. This speeds up the process and reduces fees.

What is a credit-qualifying FHA streamline?

There are two types of FHA streamline refinance: credit-qualifying and non-credit-qualifying. The non-credit-qualifying option is about as streamlined as it gets — there's no appraisal, no credit check and the lender doesn't assess your debt-to-income ratio, or DTI.

A credit-qualifying streamline refinance still lets you avoid an FHA appraisal, but your lender will run a credit check, thoroughly examine your ability to continue paying your loan and calculate your DTI. If you want to make certain changes to your FHA loan when you do a streamline refinance, like removing a borrower, you'll have to choose the credit-qualifying option.

Can I get an FHA streamline refinance if I don't have an FHA loan?

No, you must have an FHA-insured mortgage to get an FHA streamline refinance. It is possible to refinance a non-FHA loan into an FHA loan, but the lender would require an appraisal, income verification and credit check, so it wouldn’t be considered “streamlined.”

Why go from a conventional loan to an FHA loan? You might choose to refinance to an FHA loan to get a 203(k) refinance, which allows you to roll the cost of home improvements into the refi.

Can I get an FHA streamline refinance with a different lender?

Yes. Though you'll likely want to get a rate quote from your current lender, you can shop different FHA-approved lenders to see which will give you the best deal. In addition to the lenders we've highlighted above, you can search a list of all FHA-approved lenders on the HUD website.

What's the minimum credit score for an FHA streamline refinance?

In general, borrowers with credit scores of 580 or higher may qualify for FHA-insured loans with down payments as low as 3.5%. Borrowers with credit scores of 500 to 579 may qualify for FHA loans with down payments as low as 10%. That said, lenders can set their own minimum credit scores for FHA loans, so you may need to check with multiple lenders if your credit score is low.

With a non-credit-qualifying FHA streamline refinance, a credit check is not required. Instead, the lender will use your mortgage payment history to assess your ability to repay the new loan. You'll need to have at least six months' worth of on-time payments; in the six months prior to that, you can have had no more than one late payment.

Can I get an FHA streamline cash-out refinance?

No. The FHA’s streamline refinance program limits borrowers from taking out more than $500 in cash from the refinance. If you're looking to get cash out from your refi, you'd have to choose an FHA cash-out refinance.

Do I have to pay closing costs on an FHA streamline refinance?

Yes, you will have to pay FHA closing costs, including a new upfront mortgage-insurance premium. Closing costs can't be rolled into an FHA streamline refinance, though you may be able to use gift money or other sources of funds to help cover those costs (your lender will have to approve the sources).

Is an FHA streamline refinance a good idea?

Whether any refinance is a good idea depends on your unique situation. One requirement of any FHA streamline refinance is that it has a "net tangible benefit" to the borrower.

For example, if you lower your rate but keep the same term, you'd be paying less interest overall — a net tangible benefit. On the other hand, if you dropped your rate but extended your term, you might lower your monthly payment but end up paying more interest over time. That scenario wouldn't cut it for an FHA streamline refinance.

To decide whether an FHA streamline refinance might benefit you, run the numbers with a refinance calculator. This can help you see how a better rate or a different term could impact your monthly payments and the total interest paid over the life of the loan. Also consider how long it will take you to break even — when your savings on the new loan are greater than your cost of getting it.

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Last updated on October 9, 2020

Methodology

NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services each lender offers to consumers who are actively shopping for the best mortgage. The five key areas we evaluated include the variety of loan types and products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available Home Mortgage Disclosure Act data. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.

To recap our selections...

NerdWallet's Best FHA Streamline Refinance Lenders of 2020