10 Best FHA Streamline Refinance Lenders of 2021

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.

» MORE: What you need to know about FHA streamline refinances

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.

» MORE: What's involved in an FHA appraisal

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.

» MORE: Refinancing to an FHA 203(k)

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.

» MORE: Tips for getting the best FHA loan rates

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.

» MORE: FHA loan credit score requirements

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.

» MORE: Learn the basics of 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).

» MORE: What are FHA closing costs?

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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