Where can I refinance an FHA loan? Many want to know what their FHA refinance options are, but there are some misconceptions about refinancing that should be cleared up so borrowers understand all their options and not just the most obvious choices. For example, did you know you can refinance an FHA mortgage loan without an FHA-required credit check? (More information on that transaction is below.)
The most basic answer to the question is that you may refinance an FHA mortgage at any participating FHA lender who offers the type of refinancing you seek, and your options may include loans that feature cash back, those which have no cash back permitted but allow a no-credit-check transaction, etc.
But there’s more to this issue than just who and where you choose to refinance with.
FHA Refinance Loans Are For FHA and Non-FHA Mortgages
Borrowers with existing FHA mortgages do have more options than their non-FHA counterparts looking to refinance. Those with non-FHA loans may apply for FHA cash-out or no cash out refinance loans, but FHA borrowers have the added benefit of being able to apply for FHA Streamline Refinance loans, which have no FHA-required credit check or appraisal.
A lender may require one or both depending on the rules of that financial institution, but if your lender doesn’t, there’s the added savings of not paying an appraisal fee or a credit check fee. FHA Streamline loans are available from participating lenders who choose to offer them, but you may find that not all lenders offer identical options at refinance time.
FHA Refinance Loans Are For Owner/Occupiers
In general, your FHA refinance loan, new purchase loan, or reverse mortgage will have an occupancy requirement. That means you will, as a condition of loan approval, be required to use the property you buy or refinance as your primary residence.
This requirement usually has the owner moving in within 60 days of loan closing, or maintaining occupancy in the case of refinancing. Some kinds of refinance loans may have the owner relocating temporarily due to rehab or repair work, but this is anticipated in the terms of your new loan. Which leads us to our next subject.
FHA Refinancing Is For Repair/Rehab
There are FHA refinance loans that are designed specifically for rehab, renovation, or repair. The FHA 203(k) and FHA 203(h) programs are designed for these needs, and depending on the circumstances of your rehab, one type of FHA refinancing might be open to you versus the other.
This is true of FHA 203(h) rehab loans that are used to refinance, since the 203(h) program is made for those who have been affected by a natural disaster. Talk to your loan officer about how and when to apply for an FHA 203(h) rehab loan versus the standard 203(k) rehab refinance loan.