No appraisal. No income verification on the non-credit-qualifying version. If you already have an FHA loan and rates have moved, this is the shortest path to a lower payment.
The FHA already insures your loan. Refinancing it into another FHA loan does not change the agency's exposure, so the paperwork that normally establishes risk — the appraisal, the income documentation, in some cases the credit check — is reduced or removed entirely.
That has two practical consequences. Being underwater does not disqualify you, because there is no appraisal to establish that you are. And a job change or a drop in income does not necessarily stop the file, because on a non-credit-qualifying streamline nobody is verifying income.
The requirement is that your existing loan is FHA-insured. A conventional loan cannot be streamlined; that would be an FHA cash-out refinance or a conventional refinance instead.
All three have to be satisfied, and they are measured from different starting points, which is why borrowers are sometimes surprised to find they are not eligible yet.
| Test | Requirement |
|---|---|
| Payments made | At least 6 on the loan being refinanced |
| Since first payment due | At least 6 months |
| Since closing | At least 210 days |
| Payment history | Current, with all payments made in the month due for the prior 6 months |
210 days is roughly seven months, so on most loans the closing-date test is the one that binds.
FHA will not let you refinance simply because you want to. The new loan has to leave you measurably better off, and the test is arithmetic rather than judgement.
What gets compared is the combined rate — your interest rate plus your annual mortgage insurance premium — not the interest rate alone. That matters, because a change in your MIP can carry the test even when the interest rate barely moves.
| Refinancing | Required benefit |
|---|---|
| Fixed to fixed | Combined rate drops at least 0.50 percentage points |
| ARM to fixed | Rate may not rise more than 2.0 points |
| ARM to ARM | Combined rate drops at least 1.0 point |
| 30-year to 15-year | Combined rate drops, and the payment rises no more than $50 |
There are two versions. The non-credit-qualifying streamline is the one people mean when they use the word: no credit check, no income documentation, minimal underwriting.
The credit-qualifying streamline adds a credit check and income verification. It sounds like a step backwards, but it is required in specific situations — removing a borrower from the note after a divorce, for instance — and it is sometimes the better option when your credit has improved enough to price the loan better.
One detail worth asking about: if your current FHA loan is recent, a portion of the upfront premium you already paid may be credited against the upfront premium on the new one. The credit shrinks the longer you have had the loan, which is why streamlining sooner is sometimes worth more than waiting for a slightly better rate.
Program parameters shown are current as of publication and are subject to change. All financing is subject to credit approval, property review and program availability.
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