Can You Use an FHA Streamline Refinance to Refinance a 30-Year Loan to a 15-Year Loan?

Reducing Your Loan Term With FHA Streamline Refinancing

If you currently have a 30-year FHA mortgage, can you use the FHA Streamline Refinance program to refinance into a 15-year mortgage loan? The answer is no. Unfortunately, the Streamline Refinance program only permits borrowers to refinance into a loan that is the same term or a longer term. For example, many borrowers use the FHA Streamline Refinance to refinance a 15-year mortgage into a 30-year loan.

Why The FHA Does Not Permit Term Reductions

The Streamline Refinance program is specifically designed to help certain populations, including those that may not have a steady income, or those who may be underwater on their home. As a result, the program has very lenient requirements, such as not requiring an appraisal or any form of income verification. In general, this means that the FHA wants to avoid a borrower’s mortgage payments rising with this program, as to reduce the risk of a loan default. Refinancing from a 30-year loan to a 15-year loan will pretty much always result in a vastly increased payment, so it wouldn’t be in the FHA’s best interest to allow it as part of the Streamline Refinance program.

However, borrowers who want to reduce the term of their mortgage may be able to do so under the FHA’s regular refinance program.


If you’d like to learn more, simply fill out the form below and a friendly FHA Streamline Refinance specialist will get in touch!