Eligibility by loan type

Which Loans Can Be Recast?

Before you plan around a recast, make sure your loan even qualifies. Eligibility comes down to two gates: the loan type and whether your servicer offers the service. Here's the map.

The first gate is the loan type, and the pattern is consistent across the industry: conventional loans are usually eligible, government-backed loans usually are not, and jumbo loans depend on the investor.

Loan type	Recast eligible?	Notes
Conventional	Usually yes	The most commonly eligible category.
Jumbo	Sometimes	Varies by investor/servicer — ask.
FHA	Generally no	Government-backed; not eligible.
VA	Generally no	Government-backed; not eligible.
USDA	Generally no	Government-backed; not eligible.

The second gate: your servicer

Even a perfectly eligible conventional loan can't be recast if your servicer doesn't offer it. Recasting is quietly profitable-unfriendly for lenders — they earn more from refinances — so many don't advertise it. That doesn't mean they won't do it. The move is simple: call and ask whether your loan is eligible, what the minimum principal payment is, and what the fee runs.

If your loan doesn't qualify

You still have good options. Applying your lump sum as an extra principal payment works on virtually any loan — it won't lower your required payment, but it shortens the term and cuts total interest (often by more than a recast would). If rates have dropped since you borrowed, a refinance — including an FHA or VA streamline — may lower both your rate and payment. Weigh those against each other before deciding.

Quick check: conventional + a servicer that offers it = you can likely recast. Government-backed = plan on extra payments or a refinance instead.

Why government-backed loans can't be recast

FHA, VA and USDA loans follow servicing rules set by federal agencies, and those rulebooks don't include voluntary re-amortization after a principal curtailment the way conventional (Fannie Mae/Freddie Mac) servicing guides do. It isn't your servicer being difficult — the product simply doesn't have a recast provision. The good news is these loan types usually have their own streamlined refinance programs (an FHA Streamline or VA IRRRL), which can lower your rate and payment with less paperwork than a standard refinance.

For a large-loan estimate, see the jumbo recast calculator.

Jumbo and portfolio loans: it depends who holds the loan

Jumbo loans are too large to be backed by the usual agencies, so they're held by banks or private investors, each with their own rules. Some portfolio lenders happily recast; others never do. Because there's no single standard, the only reliable answer comes from your specific servicer — and it can even differ between two jumbo loans at the same bank if they sit in different investor pools.

How to confirm in one phone call

Skip the guesswork. Call your servicer and ask three questions: Is my loan eligible for a recast? What's the minimum principal payment? What's the fee? Those three answers settle it. If the first answer is no, ask what alternatives they offer — some will let you make a large principal-only payment even when they won't re-amortize, which still cuts your interest and term. It also helps to get the answer in writing: policies shift when loans are sold to a new servicer, so a note in your records protects you if the terms you were quoted change later.

If you can't recast, you still have leverage

An ineligible loan is not a dead end. A one-time principal payment shortens the term and reduces total interest on any loan — often saving more than a recast would, just without lowering the required payment. And if rates have fallen since you borrowed, a refinance (streamlined for government loans) can lower the rate and payment together. Compare both against each other before you decide the lump sum's best home.