FHA Simple and Rate-and-Term refinances sound similar—but they are not interchangeable.
Both are no-cash-out transactions. The key distinction is what mortgage is being refinanced and the FHA product definition.
Rate and Term Refinance
FHA defines Rate and Term as a no-cash-out refinance of any mortgage in which proceeds are used to pay eligible existing mortgage liens on the property and costs associated with the transaction. This can therefore be the path from conventional or other non-FHA financing into FHA, as well as certain FHA-to-FHA transactions.
Simple Refinance
A Simple Refinance is specifically a no-cash-out refinance of an existing FHA-insured mortgage. Proceeds are used to pay the existing FHA-insured mortgage lien and eligible transaction costs. Unlike Streamline, a Simple Refinance requires an appraisal.
Why choose Simple instead of Streamline?
An appraisal can matter when current property value supports a better maximum-mortgage calculation or when the transaction needs a structure that does not fit Streamline. The lender must compare the actual Handbook calculations rather than assuming Streamline is always best simply because it requires less documentation.
Cash back
These are no-cash-out transactions. Incidental cash to the borrower is limited by FHA's applicable no-cash-out rules and should not be confused with a Cash-Out Refinance.
Official FHA policy baseline
Primary source: HUD/FHA Single Family Housing Policy Handbook 4000.1, Update 18, revised August 12, 2026. FHA identifies Cash-Out, Rate and Term, Simple and Streamline as refinance types. Section 203(k) rehabilitation refinances remain in Mortgage Navigator's separate future renovation-loan section.