FHA refinance
FHA rate-and-term refinance
Replace your current mortgage with an FHA loan to lower your rate, shorten your term, or get out of an adjustable-rate loan — without taking cash out.
What it is
A rate-and-term refinance pays off your existing mortgage and closing costs with a new FHA loan, with no cash back to you beyond a minor refund. It works whether your current loan is FHA, conventional, VA, or a portfolio loan. Because FHA allows loan-to-value up to 97.75% on a rate-and-term refinance of a primary residence, homeowners with limited equity can still qualify.
Who it's for
- Homeowners with less than 20% equity who can't qualify conventionally
- Borrowers leaving an adjustable-rate or interest-only loan
- Homeowners whose credit has improved since their original loan
- Anyone wanting to shorten a 30-year term to 20 or 15 years
The 3.5% down rule, in plain English
FHA's headline benefit is a 3.5% minimum down payment with a credit score of 580 or higher. Below 580, the minimum is 10%. Down payment funds can come from savings, a documented gift from family, or an eligible Texas down payment assistance program. FHA also allows a higher debt-to-income ratio and shorter waiting periods after a past credit event than most conventional programs.
Qualification checklist
- Primary residence, owner-occupied
- Up to 97.75% loan-to-value based on a new appraisal
- Acceptable payment history on the current mortgage
- New loan amount within your county's FHA limit
- A net tangible benefit — a better rate, term, or loan structure
This site is not affiliated with or endorsed by HUD, the FHA, or any government agency. Rate and payment examples are estimates for illustration only. Rates are subject to change and this is not a commitment to lend. Actual APR depends on credit, occupancy, loan amount, and property details.