A lower credit score can open the door to an FHA refinance.

A standard FHA refinance lets you switch from a different mortgage type (like a conventional mortgage loan) to an FHA loan, requiring full documentation and underwriting. An FHA streamline refinance is only for existing FHA loans and lives up to its name — less paperwork, often no new appraisal, and minimal income verification.

An FHA loan can offer lower credit score requirements, potentially smaller down payments, competitive interest rates, and flexible debt-to-income ratios. These make FHA loans potentially more accessible to home buyers when conventional loans aren’t an option.

It’s important to remember that most FHA loans require you to pay mortgage insurance premiums (MIPs) in your closing costs and throughout the life of the loan (unlike conventional loans), and loan limits may be lower than with some conventional options. 

There are three main choices for FHA refinancing options: Standard rate/term refinance (switch your current mortgage loan to an FHA loan with new terms), streamline refinance (simplified process for existing FHA loans), and cash-out refinance (borrow more than you owe and pocket the difference).

For most FHA refinances, you’ll need to have made at least six monthly payments on your current mortgage and waited at least 210 days since your closing date. For streamline refinances, you’ll also need to show a “net tangible benefit” — like a lower rate or payment — to qualify.