Conventional vs FHA vs VA Refinance: Which Loan Program Fits You?
Not all refinances are created equal. The loan program you choose affects your rate, how much equity you need, and whether you'll pay mortgage insurance. Here's how the three most common programs stack up.
Conventional refinance
Backed by Fannie Mae or Freddie Mac. Best for borrowers with strong credit and at least 5–20% equity.
- Min. credit score: 620 (740+ for best rates)
- Min. equity: 3–5% for rate-and-term; 20% to drop PMI
- Mortgage insurance: PMI required under 20% equity, removable later
- Best for: Homeowners with good credit who want flexibility and no upfront fees
FHA Streamline refinance
For homeowners who already have an FHA loan. Skips most of the underwriting paperwork.
- Min. credit score: 580 (some lenders 620+)
- Min. equity: None — no appraisal required on the streamline
- Mortgage insurance: MIP for the life of the loan in most cases
- Best for: Existing FHA borrowers who want a faster, cheaper refi
VA Interest Rate Reduction Refinance Loan (IRRRL)
Available to eligible veterans, active-duty service members, and surviving spouses with an existing VA loan.
- Min. credit score: Set by lender; many allow 580–620
- Min. equity: None
- Mortgage insurance: None — but a VA funding fee (0.5% IRRRL) applies
- Best for: Veterans with a current VA loan looking to reduce their rate quickly
Quick comparison table
| Program | Min. Score | Min. Equity | Insurance |
|---|---|---|---|
| Conventional | 620 | 3–5% | PMI (removable) |
| FHA Streamline | 580 | None | MIP (life of loan) |
| VA IRRRL | 580–620 | None | None (funding fee) |
Which should you choose?
If you have 20%+ equity and a 700+ score, conventional is almost always cheapest long-term because you can drop PMI. If you have an FHA loan and rates have dropped, the FHA Streamline is the fastest path. If you're a veteran with a current VA loan, the VA IRRRL usually beats them all on cost and paperwork.
Don't refinance blind
Get Loan Estimates from at least three lenders within a 14-day window — credit bureaus treat them as a single inquiry, so it won't hurt your score.