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, 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.

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 term actually refers to a different FHA refi program:

• Simple Refinance = FHA to FHA
• Rate-and-Term Refinance = 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 good reason — it’s fast, doesn’t require an appraisal, and often skips income documentation. But to access that convenience, you need to meet 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 don’t qualify for the 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, and you must have made at least six on-time monthly payments.

If you 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 that case, a Simple Refinance might be your only near-term option.

2. You Can’t Cover Closing Costs Out of Pocket

One of the biggest advantages of the Simple Refinance is that you can roll closing costs into the new loan. With an FHA Streamline, you can’t.

Closing costs can run into the thousands of dollars. The FHA Simple Refinance allows you to borrow up to 97.75% of your home’s appraised value — which may be enough to cover those costs without paying anything out of pocket at closing.

Here’s a side-by-side example:

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

*Figures are for illustrative purposes only and will vary by borrower.

In this example, the Simple Refinance applicant required an appraisal and income/credit reverification — but had no out-of-pocket costs. The Streamline applicant skipped those steps but had to bring $5,000 to closing. Often, the right program comes down to how much cash you’re willing to put into the refinance.

3. You Want to Remove a Borrower from the Loan

You can remove a borrower through an FHA Streamline Refinance — particularly in cases of divorce, legal separation, or death. But doing so adds complexity. In most cases, you’ll need to:

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

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 removing a co-borrower, talk to your lender about both options — the right path will depend on your payment history, credit, and lender policies.

FHA Simple Refinance Requirements

The FHA Simple Refinance is more like a traditional mortgage application than the Streamline. It requires:

• A full credit check
• A 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 meet the credit score requirement (see below)

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

Closing Costs: Can typically be rolled into the new 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 equity). However, most lenders — including Refi.com — apply stricter requirements. Refi.com requires a minimum credit score of 620 for an FHA Simple Refinance.

Benefits of an FHA Simple Refinance

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

• Lower your interest rate depending on current market conditions
• Reduce monthly payments by refinancing to a lower rate or longer term
• Switch from an ARM to a fixed-rate loan for long-term 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 FHA refinance options:

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 targeting the Simple Refinance program. It becomes relevant when:

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

If that’s your situation, the FHA Simple Refinance could give you a path to better mortgage terms — without having to start over with a conventional loan.

Ready to get started? Begin your FHA refinance application with Refi.com today.

More FHA Refinance Resources