Can You Refinance an FHA Loan to a Conventional Loan?

You can refinance an FHA loan to a conventional mortgage, and it may be worth it if you’ll reap a specific financial benefit — like lowering your monthly mortgage payments, saving on overall interest charges or reducing your mortgage insurance costs.

However, you’ll also need to meet more stringent qualifying requirements in order to trade your FHA loan in for a conventional mortgage. We’ll cover the advantages and drawbacks of refinancing an FHA loan to a conventional loan, as well as common alternatives.

Can you refinance an FHA loan to a conventional loan?

Yes, as long as you qualify for the conventional loan. You’ll need a higher credit score and lower debt-to-income (DTI) ratio to get the best rate on a conventional loan versus one backed by the Federal Housing Administration (FHA).

You may qualify to refinance an FHA loan to a conventional loan if:

• Your credit score is higher. You’ll need a minimum 620 credit score for conventional financing (compared to a minimum credit score of 500 for an FHA loan).
• You’ve paid off a lot of debt. Conventional lenders prefer that your total monthly debt makes up 45% or less of your income.
• You’re borrowing within conventional limits. Lenders use a number called your loan-to-value (LTV) ratio to compare how much you’re borrowing to your home’s value. Conventional lenders set a 97% maximum LTV ratio for rate-and-term refinances and an 80% limit for cash-out refinance loans.
• You can afford closing costs and fees. It typically costs 2% to 6% of your loan amount to refinance a mortgage.

  Read more about the minimum requirements for a refinance.

How soon can I refinance an FHA loan to conventional?

Lenders don’t set a limit on how soon you can refinance from an FHA loan to a conventional loan. Before you take the leap, make sure that:

1. You can qualify under conventional loan guidelines. As long as you meet the minimum mortgage requirements set by Fannie Mae and Freddie Mac, you don’t have to wait to make the change.
2. You’ve identified your financial goal. You may be refinancing to reduce your monthly payments, lock in a lower interest rate or reduce your loan term — just make sure that you’re clear on what you want to get out of your refinance.  Read more about when you should refinance your mortgage.
3. You’ve calculated your break-even point. A refinance break-even point is when the savings earned through refinancing are more than the costs to refinance. Your break-even point needs to make sense with your life plans; if you’re planning to move or sell the home before that point, a refinance isn’t a good idea.

Why should I refinance from an FHA to a conventional loan?

Before you take the leap to refinance, make sure you’ll benefit financially. Here are some of the best reasons to refinance from an FHA loan to a conventional loan:

• To shorten your loan term. Switching to a 15-year mortgage from a 30-year loan can save you thousands of dollars in interest charges. 15-year mortgage rates are also usually lower than 30-year rates, which means additional savings.
• To get rid of mortgage insurance. If you refinance an FHA loan to a conventional loan, you may be able to eliminate monthly mortgage insurance. Conventional loans don’t require mortgage insurance if you have at least 20% equity in your home.
• To reduce how long you’ll have to pay for mortgage insurance. One of the drawbacks of FHA financing with a minimum down payment is you’ll pay monthly FHA mortgage insurance for the life of the loan. With a conventional loan, you may still have to pay private mortgage insurance (PMI) if you don’t have 20% equity, but it drops off automatically once you’ve paid your loan balance down to 78% of the original value. (You can also request PMI cancellation if you’ve made extra payments to bring your loan balance down to 80% of your home’s original value.)
• To borrow a higher loan amount than FHA loan limits allow. As of 2025, the conventional conforming loan limit is $806,500 for a single-family home in most parts of the country. The FHA loan limit is much lower: $524,225 for one-unit homes in most U.S. counties.
• To tap home equity without paying mortgage insurance again. You can borrow up to 80% of your home’s value with either an FHA or a conventional cash-out refinance. However, unlike an FHA cash-out refinance loan, a conventional cash-out refi doesn’t require any mortgage insurance.
• To refinance sooner than you could with an FHA streamline refinance. There are no time limits on how soon you can refinance from FHA to conventional. However, you’ll need to make at least six payments on your current FHA loan to take advantage of the easy qualifying guidelines of an FHA streamline refinance.
• To separate your finances from a co-borrower or spouse, including:
  • To remove a cosigner from your mortgage. If you’re making more money than when you bought your home, you may be able to remove a relative or parent from your loan if they cosigned to help you qualify for an FHA loan.
  • To leave a spouse’s finances out of the picture. If you live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin), your spouse’s debt is included in the DTI calculation when applying for an FHA loan regardless of whether they’re on the loan. However, you can leave your spouse and their debt off a conventional loan refinance, no matter where you live.

  A mortgage refinance calculator can help you run the numbers on how much the refinance will cost versus how much it will save you in the long run.

Drawbacks of refinancing an FHA to a conventional loan

• You may not qualify if your credit scores haven’t improved. Conventional lenders won’t approve your loan without a minimum 620 credit score.
• You’ll pay higher PMI with lower credit scores. Unlike FHA mortgage insurance, conventional PMI premiums are impacted by your credit scores.
• Your DTI ratio needs to be lower. If you’re carrying a lot of revolving debt or additional loans, you may not qualify for a conventional loan.
• You’ll pay a higher interest rate. Conventional mortgage interest rates may be higher than FHA mortgage rates. However, check the annual percentage rate (APR) when you’re comparing each option — APRs on FHA loans tend to be higher because of the expensive mortgage insurance you pay.
• You won’t have access to any streamline refinance options. The FHA streamline refinance program allows you to qualify for a lower rate or better terms without income documentation or a home appraisal. While you might get an appraisal waiver on a conventional refinance, you will have to document your income.
• You may not qualify with a recent foreclosure or bankruptcy. At least seven years must have passed since a foreclosure — and four years since a bankruptcy — to get a conventional loan. That’s significantly longer than the three-year foreclosure or two-year Chapter 7 bankruptcy waiting requirements for FHA loans.
• You’ll have to pay closing costs and fees. All refinances come with closing costs and fees, though the exact fees can vary from lender to lender.

  Check out our list of the best FHA loan lenders of 2025.

Alternatives to refinancing your FHA loan to a conventional loan

We’ve already covered the FHA streamline refinance, but you may also qualify for VA refinance options if you’ve served in the military and qualify for, or already have, a loan backed by the U.S. Department of Veterans Affairs (VA). Both of the below options allow you to replace an FHA loan with a VA loan.

Standard VA refinance

You can borrow up to 100% of your home’s value with a VA refinance, called an interest rate reduction refinance loan (IRRRL). No mortgage insurance is required, though you may be required to pay a VA funding fee if you aren’t eligible for an exemption.

VA cash-out refinance

Homeowners can borrow up to 90% of their home’s value with a VA cash-out refinance, which is more than FHA and conventional cash-out refinance loans permit.

  Use a VA loan calculator to estimate the house payment and funding fee on a VA loan.