If you modified your mortgage in 2023 or 2024, you likely saved your home—but you might feel “stuck” with a higher interest rate or a 40-year term.

With early 2026 mortgage rates projected to stabilize near 5.75% – 5.9% (down from the highs of previous years), many of our clients are asking the same question: Can I refinance my loan modification to get a better deal?

The short answer is yes, but it’s more complicated than a standard refinance. You have to navigate specific “seasoning” rules and a hidden hurdle known as the “Partial Claim.” Here is the expert breakdown of what you need to know to qualify in 2026.

1. The “Seasoning” Period: The Waiting Game

You cannot refinance immediately after a modification. Lenders require a “seasoning period”—a specific amount of time where you must prove you can make your new payments on time.

• FHA Loans: Typically require 12 months of on-time payments post-modification. If you modified your loan in early 2025, you might become eligible later this year.

• Conventional Loans (Fannie Mae / Freddie Mac): The rules are slightly more lenient. You may be eligible to refinance after just 3 consecutive on-time payments under certain circumstances, though many lenders will still ask to see 12-24 months of stability.

Expert Tip: “On-time” means strictly on time. Even one payment made 30 days late during this seasoning period can reset your clock to zero.

2. The “Silent” Hurdle: The HUD Partial Claim

This is the #1 surprise for homeowners. When you modified your FHA loan, HUD likely created a Partial Claim to cover your missed payments. This is a secondary lien (a “silent second mortgage”) that sits on your property. It doesn’t have monthly payments, but it must be paid off when you refinance.

The 2026 Reality Check: If you owe $300,000 on your main mortgage and have a $40,000 Partial Claim, you don’t just need a loan for $300,000—you need a loan for **$340,000** (plus closing costs).

• The Risk: If your home hasn’t appreciated enough in value to cover both the main loan and the partial claim, you might not have enough equity to refinance yet.

3. Credit Score Requirements in 2026

While a loan modification helps you avoid foreclosure, the process often leaves a temporary dent in your credit score. To refinance into a conventional loan in 2026, you generally need:

• Minimum Score: 620 (though 680+ gets you the advertised “sub-6%” rates).
• Clean History: No new late payments on any debt (cars, credit cards) in the last 12 months.

If your score is still recovering check out our guides on How a Loan Modification Affects Your Credit Rating and for additional tips see our Post-Modification Budgeting: Tips, Tools, & Free Courses for 2026.

4. Should You Do It? The “Break-Even” Math

Just because you can refinance doesn’t mean you should.

• Stick with the Mod if: You have a 5% fixed rate or below (rare for recent mods) or if refinancing would drastically increase your monthly payment due to a shorter loan term (moving from a 40-year mod back to a 30-year loan).
• Refinance if: You are stuck in a modification with an 7-8% interest rate or higher and your credit score has improved enough to capture the new 2026 rates near 5.9%.

Summary Checklist for 2026

• [ ] Have I made 12 consecutive on-time payments?
• [ ] Do I know the exact payoff amount of my Partial Claim?
• [ ] Is my credit score above 620?
• [ ] Do I have enough equity to cover the new loan + the Partial Claim?

Need a Strategy Check?

Navigating the exit from a loan modification is tricky. If you are unsure if you are ready to refinance or if you are facing a new struggle with your payments, don’t guess.

Contact UCMA Today – Call 1-800-474-1407 –  read our latest Success Stories to see how others have managed their mortgage journey.