How long before you can refinance from FHA to conventional?

Question

I bought a multi family property with an FHA loan. Are there federal guidelines on how long it must "season" before I can refinance or will it vary from bank to bank. Anyone have experience with this?

Zack Karp · Answer

@Scott Harlow

You can refinance from FHA to Conventional at any time, and be able to use the new appraised value.  You do not need to wait 6 months.  That seasoning is an overlay that some lenders and banks impose.

I assume this is your primary residence (since you purchased using FHA financing).  You didn't specify how many units, but if it's a 2 unit you just need 15% equity, and if a 3-4 unit then 20% equity.  This can be through the property appraising for higher (as you were asking), you would not need to put any cash down if you have enough equity based on the new appraisal value.

Hope that helps, let me know if you have any other questions!

Scott Harlow · Answer

Thanks for the info! @Zack Karp and @Upen Patel I'm going to look into this as it would be nice to drop PMI from my monthly mortgage payment.

Jeff B. · Answer

To my understanding, FHA, Fanny Mae, Fanny Mac are gov guarantors for loans, whereas Conventional vs Jumbo are loan conditions.  Thus,  these are not mutually exclusive terms.

Upen Patel · Answer

Yes, the new loan will be based on the new appraisal.

Scott Harlow · Answer

Thanks @Upen Patel. If the property appraises for 20-25% higher than what I paid, I'm assuming I could refinance to a conventional loan without having to put down any more cash (since conv. loans typically ask for 20-25%). Do you know if this is the case?

How long before you can refinance from FHA to conventional?

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