# FHA Streamline Refinance: Rates and Requirements for 2021

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With mortgage refinance rates hitting all-time lows, millions of Americans are considering refinancing their homes. According to Freddie Mac, refinance activities increased by 6% percent among first-time homeowners in the opening months of 2020.

Those who have an FHA Loan have the option to refinance through the FHA Streamline Refinance program. This option is designed to help first-time homeowners take advantage of lower FHA interest rates based on their payment history.

Here’s what you need to know about FHA Streamline refinancing and when you should consider moving forward with this option.

## What is the FHA Streamline Refinance?

As an alternative to conventional loans, FHA-insured loans are targeted toward first-time home buyers. FHA loans require a minimum down payment of 3.5%, with easier credit qualifications and lower closing costs.

The FHA Streamline Refinance program allows individuals and families with an FHA-insured loan to take advantage of lower rates with minimal paperwork. Instead of going through a credit check and income verification process, the FHA accepts a perfect on-time payment history as evidence the homeowner can re-qualify for a loan.

### Pro Tip

Homeowners with current FHA loans will find streamline refinancing is comparatively faster and easier than traditional refinance options.

“If the homeowner has made their payments on time over a period of time, they have pretty much done everything they need to do to qualify for the mortgage,” says Bill Banfield, executive vice president of capital markets at Quicken Loans. “If you’ve already been able to make your payments at the existing interest rate that you have, and can get an interest rate that’s a half-percent or more lower, you can use the FHA streamline refinance program and get the lower rates available on the market.”

Compared to a conventional mortgage, the FHA streamline process allows homeowners to skip many traditional refinancing requirements, including income verification and home appraisal. The process enables homeowners to save time and money.

### What documents do I need for an FHA Streamline Refinance?

Even though an FHA Streamline Refinance has a simplified application process, you’ll need documentation to show the following:

• Proof you’re current on your existing FHA loans payments
• Proof of current interest rate
• Employment verification
• Proof of funds to cover closing costs
• Proof of insurance

Your lender should provide you with a checklist of acceptable documents. What you’ll need to be able to show is that the refinance is providing a financial benefit to you and that you’ve been making your mortgage payments.

### When can I do an FHA Streamline Refinance?

You can take advantage of the FHA Streamline Refinance program only if you currently have an FHA loan. There is also a waiting period before you can apply for an FHA Streamline Refinance. It will need to have been at least 210 since you closed on your existing home loan, at least six months since your first mortgage payment was due, and you’ll need to have made at least six payments on the mortgage you’re refinancing.

### Can you do FHA Streamline Refinance twice?

You can use the FHA Streamline Refinance program more than once, but you’ll need to meet all the guidelines. So you’ll need to be up to date with your payments and meet the waiting period requirements. Keep in mind, you’ll also have to pay closing costs each time you refinance.

### What are the benefits of an FHA Streamline?

For homeowners with an existing FHA mortgage, an FHA Streamline Refinance has several benefits compared to other refinancing options. First off, the out-of-pocket fees you pay to refinance could be slightly lower than a traditional FHA refinance because you may be able to skip the appraisal and save yourself $300 to$600. One of the biggest benefits is how much simpler the closing process can be. With no income verification or credit check required, you may be able to get your loan refinanced much more quickly.

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