How Soon Can You Refinance an FHA Loan?

Do you think you could improve your current FHA loan terms with a refinance? There’s just one potential problem: you opened the loan recently.  

HUD requires most FHA refinance options to have at least 6 months of payments and 210 days since closing before you can refinance. Many lenders, such as Refi.com, may have their own requirements.

Depending on the option you choose—such as an FHA-to-conventional refinance, streamline, or cash-out refi—additional factors like debt-to-income ratio, home equity, and credit score may also apply.

Whichever one you’re considering, two vital questions arise: how soon can you refinance an FHA loan, and what are the qualification requirements for those options?

Refi.com’s FHA Refinance Requirements

How soon can you refinance with Refi.com? Refi.com requires 210 days after your first mortgage payment and 6 full monthly payments for FHA rate-and-term and FHA streamline refinances. For an FHA cash-out refinance, you must have occupied the home for 12 months.

Additionally, Refi.com requires a 620 FICO credit score for FHA cash-out, FHA rate-and-term, and FHA-to-conventional refinances. Start your application here.

Eligibility Rules For An FHA Refinance

Because there are several ways to refi your current FHA loan, it’s helpful to break down what’s needed for each option. This includes several factors:

1. Seasoning requirements: Often, a minimum length of time must pass from the initial closing date before you can move on from your current loan. This is called the seasoning period.
2. Payment history: This is the minimum number of payments on your current loan required before you can refinance (which is another form of seasoning requirement).
3. Home equity position: This is the amount of equity you’ve accrued, often expressed by the loan-to-value (LTV) ratio; your LTV reflects the proportion of the loan amount you want to borrow compared to the property’s appraised value/equity. Lenders assess the LTV to gauge risk level; a higher LTV indicates greater risk, which means you have less equity in the property. If you have an LTV of 80%, you’ve accrued at least 20% equity.
4. Debt-to-income (DTI) ratio: Your DTI compares your monthly debt payments to your income, helping lenders determine if you can handle more debt when refinancing a mortgage. A lower DTI means you have more income relative to your debt, making you less risky, while a higher DTI suggests you might be stretched thin and could struggle with new payments. Lenders typically prefer a DTI below 43% for refinancing.
5. Credit score: Your three-digit credit score, ranging from 300 to 850, shows how well you handle debt based on your payment history and credit use. When refinancing a mortgage, lenders look at your score to decide how risky it is to lend to you. A higher score means you’re a safer bet, which can help you get lower interest rates and better loan terms. If your score is lower, you might face higher rates or struggle to get approved. Generally, scores above 700 are considered good, while those below 620 can make refinancing tougher.

Now, let’s dig deeper into what’s required for each FHA refi option. First, a quick snapshot of what is commonly needed. Keep in mind that lenders, like Refi.com, often have their own requirements. 

	Min. Seasoning	Min. Mo. Payments	Max LTV	Max DTI	Min. Credit Score
FHA-to-Conv. (No Cash Out)	None	None	95%	43-45%	620
FHA Streamline	6 mo. / 210 days*	6 consec.	None	None	None
FHA Rate-and-Term	None	6 consec., or all payments on time if less	97.75%	43-45%	580
FHA Simple	None	6 consec., or all payments on time if less	97.75%	43%	580
FHA Cash-Out	Owned and lived in the home 12 months	12 consec.	80%	43%	600+
FHA 203(k)	6 mo. / 210 days*	6 consec.	Lesser of as-is value plus improvements or 110% of after-improved value	43%	580

*6 months since your first mortgage payment / 210 days from the closing date of your current loan

Do you qualify for an FHA refinance? Here’s a quick look at how FHA and conventional refinance interest rates are trending, which can be an important factor for refinancing:

How we source rates and rate trends

FHA-to-Conventional Refinance

Curious how soon you can refinance an FHA loan to a conventional loan? Here’s what is commonly needed:

• Minimum seasoning: None for no-cash-out refinances. 12 months for cash-out.
• Minimum monthly payments: None
• Max LTV: 95%
• Max DTI: 43-45%
• Minimum credit score: 620

FHA Streamline Refinance

The FHA streamline refinance is a quick and easy option for homeowners with existing FHA loans, offering a simplified process without needing a new appraisal, extensive credit checks, or proof of income in most cases. It provides a faster alternative to traditional refinancing, and even those who may not qualify for other refinancing options—such as unemployed borrowers, lack sufficient income history, have limited home equity, or face credit challenges—might still be eligible.

Here’s what’s required for an FHA Streamline refinance:

• Minimum seasoning: 6 months since your first mortgage payment / 210 days from the closing date of your current loan
• Minimum monthly payments: 6 consecutive
• Max LTV: None
• Max DTI: None
• Minimum credit score: Determined by the lender

“This program is designed to be a fast, minimal-documentation refinancing option. There is no minimum credit score requirement, and the DTI ratio is not typically a barrier,” Dennis Shirshikov, an economics and finance professor at City University of New York/Queens College, says. “Also, the maximum LTV is not a concern with this program, as it does not involve a home appraisal.”

FHA Rate-and-Term Refinance

Desire a simple FHA rate-and-term refi? Follow these numbers:

• Minimum seasoning: 6 months since your first mortgage payment / 210 days from the closing date of your current loan
• Minimum monthly payments: 6 consecutive
• Max LTV: 97.75%
• Max DTI: 43-45%
• Minimum credit score: 580 (500 with 10% equity)

“A rate-and-term refinance is great for lowering your rate or changing your loan’s terms without cashing out,” explains Andrew Lokenauth, a personal finance expert and founder of TheFinanceNewsletter.com. Check out our guide to rate-and-term refinances to learn more.

Note: Refi.com requires a 620 credit score for an FHA rate-and-term refinance.

FHA Simple Refinance

An FHA Simple Refinance lets homeowners replace their current FHA loan with a new one to cover the existing loan and transaction costs without taking cash out of their home equity. The benefits include potentially lower interest rates, which can reduce monthly payments, and the ability to switch from an adjustable-rate to a fixed-rate mortgage. Since the homeowner already has an FHA loan, the refinancing process tends to be quicker and easier, and closing costs may be rolled into the new loan.

The requirements are as follows:

• Minimum seasoning: None
• Minimum monthly payments: 6 consecutive, or all payments on time if less than 6
• Max LTV: 97.75%
• Max DTI: 43-50%
• Minimum credit score: 580 (500 with 10% equity)

Note: Refi.com requires a 620 credit score for an FHA simple refinance.

FHA Cash-Out Refinance

If you seek to tap home equity and pocket extra cash at closing with an FHA cash-out refinance, abide by these numbers:

• Minimum seasoning: 12 months of owning the home
• Minimum monthly payments: 6 consecutive
• Max LTV: 80%
• Max DTI: 43%
• Minimum credit score: 500 is the official HUD guideline, though most lenders require 600+

Note: Refi.com requires a 620 credit score for an FHA cash-out refinance.

FHA 203(k) Refinance

An FHA 203(k) loan, also known as an FHA rehab loan, allows you to include the cost of home repairs and renovations in your refinance. There are two types: the Standard 203(k) for projects over $75,000 and the Limited 203(k) for those under that amount. Eligible projects include structural repairs, cosmetic updates, accessibility improvements, energy efficiency upgrades, and the removal of hazards like mold or asbestos.

Here’s what is needed:

• Minimum seasoning: None
• Minimum monthly payments: 6 consecutive, or all payments made on time if less than 6
• Max LTV:  Lesser of as-is value plus improvements or 110% of the after-improved value
• Max DTI: 43-50%
• Minimum credit score: 580

Note: Refi.com does not offer FHA 203(k) refinances.

Other Considerations Before Refinancing Your FHA Loan

Just because enough time has passed and you can qualify for a refinance doesn’t necessarily mean you should pull the trigger. Before committing to an FHA refinance, it’s smart to carefully consider the various factors involved, including:

• Closing costs: “Closing costs for an FHA refinance generally range from 2% to 6% of the loan amount, which can add up. It’s crucial to ensure you can cover these costs upfront or roll them into the new loan – depending on what type of refinance you choose,” suggests Shirshikov.
• Credit history: Lenders will carefully assess your creditworthiness, so maintaining a solid payment record can help you qualify for better rates.
• Interest rate timing: “Market conditions matter here. Don’t chase small rate drops – time your rate lock carefully,” advises Lokenauth.
• Remaining loan term: “Shortening your loan term with a refinance can save money on interest but may result in higher monthly payments,” Shirshikov adds. “On the other hand, extending the loan term reduces payments but increases overall interest paid.”
• Breakeven point: Your breakeven point is very important. This is how long it will take for the savings from the new loan to offset the costs of refinancing. Typically, this is 2 to 5 years, which means you should plan on remaining in your home for at least that time.

Lokenauth also recommends asking yourself crucial questions to help determine whether now is the right time for that refi.

“How long will you stay in the home? Will you truly save money over time? What is your current financial health? Are rates likely to improve soon? Is an FHA loan still your best option? And if not, how soon can you refinance out of an FHA loan?” he asks.

Get Started Today

If you’re ready to explore your FHA refinance options, Refi.com is here to help. Whether you’re looking to lower your rate with a streamline refinance, switch to a conventional loan, or access your home equity with a cash-out refi, our team can guide you through the process and help you find the right solution for your financial goals. Start your refinance application today and discover how much you could save.