Does the FHA Refinance Loans?

FHA refinance loans are available to homeowners who wish to refinance their mortgage loan, provided that they meet certain guidelines and criteria.

Types of FHA Refinance Loans

The two refinance loan programs offered by the FHA are the streamline refinance and the FHASecure refinance plans. Streamlined refinancing is offered to homeowners whose loans are insured by the FHA, while FHASecure is provided for homeowners who obtained mortgage loans from conventional mortgage lenders.

Refinance Loan Requirements

A borrower is qualified to apply for a streamline refinance loan under specific guidelines established by the government:

  • the borrower's mortgage should be FHA-insured
  • the borrower's mortgage should be current; a mortgage on default is not eligible
  • the borrower's purpose of refinancing is to reduce his monthly payment for the principal and its related interest rate
  • the borrower must not withdraw any amount of cash from a refinanced mortgage

A borrower is eligible to request an FHASecure refinance loan if he has:

  • an excellent payment history record
  • a minimum 3 percent cash or equity in the home
  • a sustainable employment history
  • the sufficiency of income to guarantee that the loan will be paid