FHA Simple Refinance: When the Streamline Isn’t an Option

When most homeowners think about refinancing an FHA loan, they picture two main options: 

• The popular FHA Streamline Refinance for its simplicity and relaxed requirements, or
• A cash-out refinance to tap home equity

But what if you don’t qualify for the streamline program and don’t need cash back either?

That’s where the FHA Simple Refinance comes in.

Despite the lack of buzz around it, the simple refinance can be a helpful solution for FHA homeowners looking to improve their mortgage terms—especially when other options are off the table. Here’s what you need to know.

Quick Take: FHA Simple Refinance

• Used when you already have an FHA loan
• Good fallback if you don’t qualify for a Streamline
• Requires appraisal, credit check, income docs
• Closing costs can be rolled in, unlike streamline refis
• Cannot be used to take cash out
• May allow borrower removal

What Is an FHA Simple Refinance?

The FHA Simple Refinance is designed for homeowners with an existing FHA loan who want to improve their loan terms — like lowering the interest rate, reducing monthly payments, or switching from an ARM to a fixed rate.

Note that while the FHA Simple Refinance is sometimes described as a “rate-and-term” refinance, that actually describes a different FHA refi program. 

• Simple = FHA to FHA
• Rate-and-Term = Non-FHA to FHA (or other unique cases)

If you already have an FHA loan and want to refinance without cashing out, the Simple Refinance is likely what your lender will offer, especially if you don’t qualify for a Streamline.

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Why You Might Not Qualify for an FHA Streamline Refinance

The FHA Streamline is popular for a reason: it’s fast, doesn’t require an appraisal, and often skips income documentation. But to access that convenience, you need to meet some very specific eligibility requirements — particularly around timing and payment history. If you don’t check all the right boxes, your lender may point you toward a Simple Refinance instead.

Here are the most common reasons borrowers are denied a Streamline:

1. Not Enough Time Has Passed (Seasoning Requirements)

To qualify for a streamline, your FHA loan must be:

• At least 210 days old from the due date of your first payment
• You must have made at least 6 on-time monthly payments

If you’ve recently closed on your FHA loan or had a period of forbearance, you may not meet this minimum seasoning timeline—even if you’re otherwise financially stable.

In this case? A Simple Refinance might be the only way to refinance sooner.

2. You Can’t Cover Closing Costs Out-Of-Pocket

A top reason people choose a Simple Refinance is that you can roll closing costs into the new loan. With an FHA Streamline, you can’t. 

Closing costs can equal thousands of dollars. Unless you have the cash in the bank, the lender gives you a healthy closing cost credit, or both, you may not qualify for a Streamline.

FHA Simple Refinance lets you take out a new loan up to 97.75% of the home’s value. If that covers your closing costs, you may not need to pay anything out-of-pocket at closing.

For example:

	Simple	Streamline
Current Loan Balance	$250,000	$250,000
Current Value	$261,000	$261,000
Closing Costs*	$5,000	$5,000
Max Loan	$255,000	$250,000
Cash to Close	$0	$5,000

*Figures are for example purposes only and will be different for each borrower.

In this example:

• The Simple Refinance applicant had to get an appraisal and a reverification of credit and income, but had no out-of-pocket expenses.
• The FHA Streamline applicant skipped the verifications, but had to pay $5,000 at closing.

Often, the program you choose depends on the cash you’re willing to invest in the refinance.

3. You Want to Remove a Borrower from the Loan

You can remove a borrower through an FHA Streamline Refinance — especially in cases of divorce, legal separation, or death. But doing so adds complexity to the process.

In most cases, you’ll need to:

• Prove that you’ve made at least six months of mortgage payments on your own
• Show documentation like a final divorce decree or death certificate
• Requalify for the loan based on your credit and income alone

While some lenders allow borrower removal under the Streamline program, others may prefer to process it as a Simple Refinance, which is more structured for that type of change.

If your main goal is to remove a co-borrower and keep the home, talk to your lender about both options. The right path will depend on your payment history, credit, and the lender’s policies.

FHA Simple Refinance Requirements

The FHA Simple Refinance is more like a traditional mortgage application than the streamlined version. It includes:

• Full credit check
• Home appraisal
• Income and debt documentation

You may be eligible if:

• Your current mortgage is an FHA loan
• You’ve made on-time payments for the past 6–12 months
• The home is your primary residence
• The property meets FHA appraisal standards
• You have an eligible credit score (more on this below)

One key difference: You’ll need an appraisal and standard underwriting approval—unlike the FHA Streamline, which often skips these steps.

Timeline: Expect the process to take 30–45 days from application to close.

Closing Costs: These can typically be rolled into the loan to reduce upfront expenses.

Credit Score Requirements

Official FHA guidelines allow credit scores as low as 500 with at least 10% equity or 580 with less. Most lenders, like Refi.com, have stricter requirements. 

Refi.com currently requires a 620 credit score for an FHA Simple Refinance.

Benefits of an FHA Simple Refinance

Even though it’s not as fast or flashy as an FHA Streamline or FHA cash-out refinance, the FHA Simple Refinance still offers some solid advantages:

• Lower your interest rate (depending on market conditions)
• Reduce monthly payments by refinancing to a lower rate or longer term
• Switch from an ARM to a fixed-rate loan for stability
• More lenient credit score requirements than conventional refinancing
• Roll closing costs into the loan to reduce out-of-pocket expenses
• Option to remove a borrower from the mortgage

FHA Simple Refinance vs. Streamline vs. Cash-Out

Here’s how the FHA Simple Refinance compares to the two most common types of FHA refinances:

Feature	Simple Refinance	Streamline Refinance	Cash-Out Refinance
Credit check required	Yes	Often no	Yes
Appraisal required	Yes	Often no	Yes
Cash back allowed	No	No	Yes
Roll in closing costs	Yes	No	Yes
Remove borrower from loan	Yes	Sometimes	Yes
Ideal for	Improving loan terms when Streamline isn’t available	Fast refi with good payment history	Tapping equity

Bottom Line: Why Would You Get an FHA Simple Refinance?

You typically don’t start your refinance journey by targeting the “Simple” program. Instead, this option becomes relevant when:

• You were denied or don’t qualify for a Streamline Refinance
• You don’t want to cash out, but you want better loan terms
• You need to change who’s on the mortgage

If that’s your situation, the FHA Simple Refinance could give you a second chance at improving your mortgage, without having to completely start over with a conventional loan.

Get your FHA refinance started with Refi.com here.

More FHA Refinance Resources

How to Remove FHA Mortgage Insurance

6 Types of FHA Refinances: Which Is Best for You?

Should I Refinance Using FHA or Conventional?