How To Get Cash From Your Home: FHA Max LTV Refinance

How much money can I borrow with and FHA loan.

Cash out refinance graphicThe FHA cash-out refinancing option enables homeowners to pay off their current mortgage and borrow up to 80% of the appraised value of their home. In other words, after paying off the current mortgage and closing expenses, the homeowner must have 20% equity. Here's an illustration:

Current Home Value 250,000
X 80% of home value ($250.00 X 80%) = 200,000

Less payoff, the current loan


Less closing costs and prepaid costs (estimated)

Maximum FHA cash back at settlement 46,000

Eligibility for a Cash Out Refinance

Occupancy Requirements – Only owner-occupied Principal Residences are eligible for cash-out refinances. The Borrower must have owned and occupied the property securing the cash-out refinancing as their Principal Residence for the previous 12 months prior to the date of case number assignment. There is an exception for inherited properties.

Payment History Requirements – The borrower has paid all of their mortgage payments within the month due for the preceding 12 months or since the borrower acquired the mortgages, whichever comes first. In addition, all mortgage payments secured by the subject property must be made within the month due for the month previous to the mortgage closing.

Mortgage payments must be made for at least six months on properties with mortgages.

Cash-out transactions may be used to refinance properties that are free and clear.

Maximum Mortgage Amounts – As stated earlier, the maximum loan amount is 80% of the appraised value; further, the loan must be less than the FHA maximum loan amount for the county where the home is located.

If there is a second or third mortgage on the property, the total of all loans (including the first mortgage) may not exceed 80% of the combined loans.

Rotating question markFrequently Asked Questions (FAQs)

Q. Does FHA do cash out refinance?
A. Yes. There is a limit on how much money that can be loaned out. It is 80 percent of the value of the house and less than the FHA maximum loan amount for the U.S. county where the house is situated.

Q. Is there a FHA no cash out refinance?
A. The FHA offers a variety of refinance programs, including a streamline mortgage that does not require an appraisal or credit check. See Streamline refinance

Q. What is the time period for FHA cash out refinance seasoning?
A. The FHA loan must be at least 12 months old, with the last 12 payments paid on time.


In conclusion, the FHA cash-out refinancing option is a valuable tool for homeowners who are looking to take advantage of the current low interest rates and tap into their home equity. It is important to consult with a qualified mortgage professional to see if this option is right for you.