If my existing mortgage is not FHA-insured, and I have a PACE obligation, can I refinance into an FHA mortgage?

Yes. If you meet the eligibility requirements outlined in Handbook 4000.1, you can refinance into an FHA-insured loan using a Cash-Out or a No Cash-Out Refinance (Rate and Term, or Simple Refinance).  As a condition of loan approval, any PACE obligation must be paid off in full at closing. 

Each borrower should talk to his or her lender and compare the terms and costs of the various financing options to determine what is best for his or her situation and needs. 

To locate an FHA-approved lender, please visit: https://www.hud.gov/program_offices/housing/sfh/lender/lenderlist 

For additional information see Handbook 4000.1, Section II.A.8.d.vi.(A)(2)(b) and II.A.8.d.vi.(B)(3)(a) available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh


All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.


Topic Number: KA-03541