Current FHA cash-out guidelines, updated from one source.
These are HUD’s numbers as Texas applies them, served from Lendmire’s guideline source: on a Texas homestead a cash-out refinance is a home equity loan under the state constitution, which caps the whole loan, financed premium included, at the same share of value as HUD’s cap, and adds a waiting period, closing rules, and a fee cap, all listed under the considerations below.
Of the adjusted value on a principal residence; 80% combined with any lien that stays
Two ceilings govern the leverage: 80% on the new first mortgage and 80% on all liens combined, both measured on the adjusted value. The rate-and-term refinance, which returns no cash, reaches 97.75%; the cash-out gives up that reach in exchange for the proceeds.
Owned and occupied as the principal residence before the case number is assigned
Before the case number, the home must have been the borrower’s principal residence for twelve months, documented by the deed and by records at the address. A loan seasoned less than a year must have been paid on time throughout, and a non-occupant co-borrower cannot be added to carry the ratios.
Plus an annual premium, charged monthly, for eleven years at cash-out leverage
Expect two premiums. The first is 1.75% of the base loan, added to the balance at closing; the second is 0.50% of the balance each year on a standard thirty-year loan at this leverage, divided into the monthly payment and ending after eleven years. A larger base loan pays the higher annual rate shown in the table.
Ratios of 31/43 by reference, higher with compensating factors
HUD’s floor is a 500 decision score, 580 earns maximum financing, and the wholesale programs begin at 580. The ratios open at 31/43 and reach 40/50 under manual underwriting with two documented compensating factors; an automated approval may run past the reference on its own finding.
| Base loan | Leverage | Annual premium | Duration |
|---|---|---|---|
| Standard base loan amounts | at or below 90% LTV — the cash-out band | 0.50% | 11 years |
| Standard base loan amounts | above 90% to 95% LTV — purchase and rate-and-term leverage, not cash-out | 0.50% | mortgage term |
| Standard base loan amounts | above 95% LTV — purchase and rate-and-term leverage, not cash-out | 0.55% | mortgage term |
| Larger base loan amounts | at or below 90% LTV — the cash-out band | 0.70% | 11 years |
| Larger base loan amounts | above 90% to 95% LTV — purchase and rate-and-term leverage, not cash-out | 0.70% | mortgage term |
| Larger base loan amounts | above 95% LTV — purchase and rate-and-term leverage, not cash-out | 0.75% | mortgage term |
The line-of-credit alternative: on a primary residence Lendmire’s HELOC program reaches 90% combined loan-to-value behind the existing first mortgage, with no FHA premium attached. For a stronger credit profile the conventional cash-out matches this leverage with no premium at it and one wholesale lane goes higher; eligible veterans can reach the full value, funding fee included, through VA cash-out. Every route is priced on the same numbers before anything is recommended.
FHA cash-out snapshot as of October 1, 2026 · base loan sized on the appraised value, upfront premium financed above it · FHA county mortgage limits apply, confirmed by a Lendmire loan officer and never printed here · taking cash out raises the balance and may extend the payoff · Lendmire is a broker, never the lender.
This page states program parameters only. Every figure comes from Lendmire’s guideline source, built on HUD’s published handbook and a wholesale product sheet, is current as of the date shown, and may change. Approval depends on the FHA appraisal, the automated finding, full underwriting, and the selected lender’s overlays; cash-out proceeds increase the balance secured by the home. Lendmire LLC, NMLS #2371349, licensed mortgage broker in sixteen states. Not legal, tax, or investment advice.
What an FHA cash-out refinance is — and how the file is qualified.
An underwriter opens an FHA cash-out file in a fixed order, and these cards follow it: the mechanics of the insured loan, the occupancy year and the mortgage history, the premium on the balance and the premium in the payment, and the comparison with the alternatives a Houston owner should run before choosing.
For the program overview, see Lendmire’s FHA cash-out refinance program, or the statewide guide at FHA Cash-Out Refinance in Texas; the rules are HUD’s, in Handbook 4000.1.
One new FHA loan, cash at closing
Picture the house being refinanced from scratch with HUD standing behind the lender: a base loan sized to the cap, the payoffs and costs taken from it, the upfront premium stacked on top, and the balance of the proceeds wired to you after rescission. Your old payment disappears and one new payment, monthly premium included, takes its place.
The occupancy rule and the payment history
To be eligible, at least one borrower must have owned the home and lived in it as a principal residence for the twelve months before the case number is assigned, and every mortgage payment on the property in that year must have been made within the month it was due. Inherit the home and live in it, and the twelve-month wait is waived; the payment-history rule never is.
Mortgage insurance, upfront and monthly
The premium rate does not depend on the score; it depends on where the leverage starts and how large the base loan is. A cash-out begins at or below the ninety percent band, so the monthly premium has an eleven-year span, and a larger base loan pays the higher tier in the table. A later refinance into a conventional loan is how many Houston owners end the premium early.
FHA cash-out or the alternatives
Same equity, three instruments: the FHA cash-out with its premiums and its forgiving standard; the conventional cash-out with no premium at this leverage and a stricter standard; the line of credit that adds a second lien instead of replacing the first. Lendmire prices all three for a Houston home on the same value, balance, and cash before recommending one.
Everything hangs on two inputs, the adjusted value and the current balance. The first sets the ceiling, the second sets what is left under it, and the premiums follow whatever base loan results. The calculator renders all of it for a Houston home and prints the line-of-credit figure alongside.
Where Houston’s equity sits — and how FHA cash-out fits.
Three Census measures tell the Houston equity story: the owner-household count, which is the pool of possible borrowers; the median home value, which sets how much a cap can release; and the median income, which sets the payment a typical household carries.
Read the figures as backdrop. Scale, not quotation: the median value sizes a typical base loan, and the median income sizes the payment, premium included, a typical household can carry.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Distinct Houston neighborhoods, distinct FHA files.
Sort Houston’s neighborhoods by what an FHA underwriter asks about them: how long the owner has lived there, whether the project or the property type is eligible, and what the appraiser will find when the home is inspected against HUD’s standards.
Condominiums in approved projects
For a Houston condominium the project is underwritten alongside the owner. Owner-occupancy share, reserves, the master policy, litigation, and commercial space all enter HUD’s review, the dues enter the ratios, and a building that cannot be approved sends the owner to a conventional lender instead. Median household income in Houston sits near $64,813 on the latest Census estimate.
Homes bought with FHA years ago
Plenty of Houston owners bought with FHA at the program’s minimum investment and have built equity since. For the ones whose credit still fits HUD better than the conventional programs, the FHA cash-out is the natural next loan, with the premium continuing under the new schedule. Houston counts a population near 2.33M within the Houston-Pasadena-The Woodlands, TX area.
Newer infill and recent purchases
Recent Houston infill was bought at recent prices with small down payments, so a cash-out on it meets two limits at once: the year of ownership and occupancy and a balance that leaves little room under the cap. The review tells an owner whether to proceed now or wait. The median owner-occupied home value in Houston runs near $277,800 on the latest Census estimate.
Two- to four-unit homes, owner-occupied
The older duplexes and small multi-unit buildings of Houston qualify for an FHA cash-out when the owner lives in one unit: the cap is the same as for a house, the other units’ rent counts under HUD’s rules, and the appraisal carries a rent schedule. On a Houston home at the median value, an FHA cash-out refinance at the program cap finances up to $222,000 before the financed upfront premium — the existing balance comes off the top, and the rest is the cash available before closing costs.
High-value homes near the limit
On a high-value Houston home the binding ceiling is often the county limit rather than the cap, and the premium tier steps up with the base loan. The limit is confirmed at the review, never printed here, and a loan that must exceed it is written elsewhere. Roughly 391,519 Houston households own their homes on the latest Census estimate — 42% of all households, the pool an FHA cash-out refinance draws on.
Long-held close-in homes
A close-in Houston house with years of occupancy behind it clears HUD’s twelve-month rule without effort and carries a small balance against a grown value; the one item to prepare for is the appraisal’s inspection against HUD’s minimum property requirements. About 58% of Houston’s households rent — roughly 538,885 renter households on the latest Census estimate.
The equity differs by block in Houston; the FHA rules do not. The appraisal and the old balance decide the cash on each house, and HUD decides everything else identically.
Four ways Houston homeowners put equity to work with FHA.
An insured cash-out is a tool, and the purpose decides whether it is the right one. These four purposes are the ones a Houston review sees most, each with the point that settles it.
Fund a large expense or a reserve
Tuition, medical bills, a family event, or simply cash on hand: HUD does not restrict the use of the proceeds, and they arrive in one sum after rescission. The review asks one question first, whether a line of credit, which charges interest only on what is drawn and carries no FHA premium, would serve the Houston household for less.
Replace a second lien or a line in repayment
Two liens become one fixed insured payment. The combined balances plus the costs have to fit under the base-loan cap; where they do not, a Houston owner can leave the second lien in place inside the combined ceiling and resubordinate it, or pay part of it down before closing.
Consolidate higher-cost debt into one insured payment
Retiring a stack of balances with one insured loan changes two things at once for a Houston household: the monthly outlay falls, and the ratio HUD measures is computed after the payoffs leave the file. The home now secures what was unsecured, and the balance runs on a new full term, which is the part to weigh before signing.
Renovate or repair the home
Renovation money arrives in one disbursement after rescission and is carried on the mortgage at a fixed payment. Today’s value is the one the cap applies to, not the finished value, and HUD’s minimum property requirements can put a few items ahead of the cash on an older Houston house.
Estimate the cash, the premium, and the new payment on a Houston home before requesting a quote.
Type in a Houston value, the current balance, and the cash you want; pick a term and the escrows. The calculator answers with the base-loan ceiling, the maximum cash at the cap, the total loan once the upfront premium is financed, the cash at closing before costs, principal and interest, the first-year monthly premium, the full payment, the back-end ratio against HUD’s reference, and the line-of-credit figure on the same value.
Houston FHA cash-out estimate
The defaults describe a typical Houston home, not yours; overwrite the value, the balance, and the cash.
Editable benchmark: 7.28% as of October 1, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not an FHA cash-out refinance quote.
Illustrative starting assumptions: a $280,000 home value near Houston’s median owner-occupied value, a $154,000 current balance, the FHA cap on a principal residence with the upfront premium financed, a thirty-year term at the current Freddie Mac benchmark, property taxes and insurance estimated for Texas (U.S. Census Bureau). Every field is editable.
An illustration, not a Loan Estimate, an approval, a quote, or a commitment to lend. The rate shown is the weekly Freddie Mac thirty-year conventional benchmark, used as a market reference; an FHA cash-out is priced by the lender at lock, and this is not an FHA cash-out refinance quote. HUD’s cap limits the base loan; the upfront premium is financed above it; the monthly premium for the first year follows the snapshot’s schedule. Cash available means the base loan the cap permits less the balances retired, before closing costs, which this calculator leaves out. The line figure applies the line program’s combined loan-to-value ceiling to the same value and balance. Taxes and insurance are estimates you can edit. Licensed in sixteen states for consumer mortgages. On a Texas homestead the state constitution caps the whole loan, financed premium included, at the FHA figure and adds a waiting period, a prescribed closing location, and a fee cap.
Same equity, three ways to borrow it.
A Houston homeowner can reach the same equity three ways, and the differences are structural: an FHA cash-out insures the loan and accepts a wider credit profile; a conventional cash-out reaches the same leverage with no premium at that leverage for a stronger file; a home equity line sits behind the first mortgage and prices only the new money. The cards compare them.
FHA cash-out, conventional cash-out, or a HELOC.
The insured route: a lower decision score accepted, ratios that rise with documented strength, a year of occupancy required, two premiums as the price. It delivers the lump sum, the fixed payment, and the second lien folded in, for a Houston owner the conventional programs would decline.
Where the score is solid, the conventional cash-out wins on cost: nothing added to the balance for insurance, nothing added to the payment for it, and a wholesale lane above the agency cap for the strongest files. Lendmire prices it beside the FHA route on the same value, balance, and cash for every Houston review. See Lendmire’s conventional cash-out refinance program.
The line prices only the new money and leaves the first mortgage untouched. It draws in stages, the payment during the draw period is often interest only, and there is no insurance premium; the credit standard is the line program’s own. The trade is a payment that can change and a second lien rather than one loan. See Lendmire’s home equity line of credit.
FHA for forgiveness, conventional for cost, the line for keeping the first mortgage. The written terms settle which serves a Houston owner, and the review produces them on the same value, balance, and cash for all three, with the premium counted where it applies and left out where it does not. Veterans: see the VA cash-out program.
What to prepare for a Houston scenario review.
What goes into a Houston FHA cash-out file, item by item.
A general guide to preparing, not a complete checklist: the selected lender may ask for more, depending on the transaction, the property, the automated finding, and the income picture. Nothing here is legal or tax advice.
Local details that can change the loan.
Five things to know before counting the cash on a Houston home: what the premiums add, what the occupancy and payment-history rules demand, what the appraisal can require, and what the property type and the credit record contribute.
Use these checks to keep the Houston file clean and fundable.
Before a Houston review, settle three questions: has the home been the principal residence for a year with a clean payment record; what do the premiums add to the loan and the payment; and would the conventional route reach the same cash for less.
- Know the Texas rules: The homestead cap applies to the whole loan, financed premium included.
- Price the premium: Compare the FHA payment with the premium against the conventional payment without it.
- Confirm the occupancy clock: Every mortgage payment in the prior year within the month due; no non-occupant co-borrower.
Texas homestead rules shape every FHA cash-out
No other state in Lendmire’s footprint adds these conditions to an owner-occupied cash-out, and they govern timing and cost rather than eligibility: the cap counts the premium, the waiting period is fixed, the closing location is prescribed, and the fees are limited. A Texas owner should expect the state’s timeline, and the calculator on this page applies the Texas cap.
The premium rides on the loan and inside the payment
Price the insurance as two numbers, not one: the share of the base loan added to the balance at closing, and the share of the balance collected every month for eleven years at cash-out leverage. On a Houston home the calculator shows both, and the comparison with a conventional loan is only honest when both are in the figure.
Twelve months owned and occupied, with a clean payment history
HUD measures the year to the case number date, which the lender controls, so the timing of the request matters: a Houston owner a month short of the year waits a month, and a payment made outside the month due inside that year stops the file until a clean year has passed. The deed, the address records, and the mortgage history are the three proofs.
Condominiums need HUD project or single-unit approval
HUD insures a condominium only inside an approved project or through single-unit approval, so a Houston unit in a building with neither cannot take an FHA cash-out at all. Buildings with an approval on file are routine; newer or investor-heavy projects need the review before anything else is ordered.
The rescission period before the money moves
Count the days before planning the money: the closing, then the federal rescission window, then the disbursement that pays the old loans and wires the cash to the Houston owner. A deadline that falls inside the window is missed, so the closing is scheduled backward from the date the cash is needed.
From a Houston scenario review to cash at closing.
An FHA cash-out moves in a fixed sequence: a review that sizes the loan on the value, the balance, and the cash; the application, the case number, and the automated finding; the FHA appraisal and underwriting; closing, the rescission window, and disbursement. Each step is described below for a Houston owner.
Scenario review
Bring the value, the balance, the cash wanted, the occupancy history, the score, and the income. A Lendmire loan officer applies HUD’s cap, finds the base ceiling and the cash after payoff and costs, adds the premiums, prices the conventional cash-out and the line of credit on the same numbers, and puts the terms in writing before anything is ordered.
Application and case number
The application records income, assets, debts, the property, and the occupancy; the lender requests the FHA case number, which fixes the date the twelve-month rule and the payment history are measured against, and runs the automated system. The finding lists the documentation and confirms the ratios with the closing payoffs removed.
FHA appraisal and underwriting
The FHA Roster appraiser reports a value and a condition for the Houston home, and underwriting verifies the rest: income, assets, the occupancy record, the clean year of payments, the payoffs, and the project if the home is a condominium. A value under the plan resizes the loan; a repair finding schedules the work.
Closing, rescission, and funding
At the closing table the Houston owner signs the note and the security instrument and the costs are settled; the rescission window then runs, and when it closes the settlement agent pays the old loans, records the new one, and wires the cash. The first payment, premium included, is due at the start of the second month after funding.
A brokerage built around equity lending.
Houston owners bring the file here because Lendmire arranges the FHA cash-out, the conventional cash-out, and the line, places each file across the wholesale programs rather than one lender’s sheet, and says plainly when the premium is worth paying and when it is not.
Every route, one review
No owner is steered toward the one product a lender happens to offer. Each route is run on the same value, balance, and cash, each is costed to open and to carry, and the one the numbers favor for the Houston home is the one recommended. The owner chooses with the figures in hand, not with a pitch.
Placed across wholesale programs
HUD writes the rules; each wholesale lender adds its own overlays and its own cost. The Houston file goes where the score, the leverage, and the property fit best, and the terms the owner receives come from that placement rather than from the only desk in the building.
Terms in writing, before any fee
Every review closes with written terms: base loan, premiums, cash after costs, payment, ratios, each computed on a conservative value. The Houston owner reads them first; only after agreeing the plan is worth an appraisal does anything get ordered or any fee get paid, which is the only honest order to do it in.
Trusted by homeowners & families alike.
Houston FHA cash-out refinance FAQs
The questions Houston homeowners ask most about FHA cash-out refinancing, answered in the order they usually come up.
What is an FHA cash-out refinance, and who is it for?
It is a new first mortgage insured by the Federal Housing Administration that replaces the loan on your principal residence with a larger one and pays you the difference after the old loan, any second lien, and the closing costs are settled. HUD caps the leverage, requires a year of ownership and occupancy with a clean payment record, and insures the loan with an upfront premium and a monthly one. It serves the Houston owner whose score, ratio, or credit history keeps the conventional programs closed.
How much cash can I take out with an FHA refinance?
HUD’s cap on the adjusted value sets the ceiling, and the cash is whatever remains of it after the current balance, a second lien being retired, and the closing costs are deducted; the upfront premium is then financed above the base loan. The calculator shows the Houston figures side by side with the line-of-credit alternative.
How long do I need to have lived in my home before an FHA cash-out?
Twelve months, owned and occupied as your principal residence, measured to the date the FHA case number is assigned, with every mortgage payment in that year made within the month it was due. A home you inherited and have lived in since is exempt from the twelve months, though not from the payment-history rule. A Houston home rented out during that year does not qualify until a full year of occupancy has passed.
What does FHA mortgage insurance cost on a cash-out, and how long does it last?
Upfront plus monthly, the monthly premium ending after eleven years because a cash-out begins at or below the ninety percent band. Larger base loans carry a higher annual rate; the table beneath the snapshot lists every band and tier.
What credit score do I need for an FHA cash-out refinance?
HUD’s floor and the full-financing line are both in the snapshot, and the wholesale programs begin above the floor; the decision score is the lowest of the borrowers’ middle scores. A purchase below the full-financing line is limited to lower leverage, but a cash-out already sits at a lower cap, so the practical questions are the wholesale floor and the cost tier the score lands in. A Houston borrower near the floor should expect the score to show in the price of the loan.
Can I pay off a second mortgage or a HELOC with an FHA cash-out?
A common use: fold the second lien into one insured first mortgage with a fixed payment. The cap is measured on both balances plus the costs, and the ratio on the single new payment, premium included.
How long does an FHA cash-out refinance take?
Plan around the sequence rather than a date: application and case number, appraisal, underwriting, closing, rescission, disbursement. If the cash has a deadline, say so at the review so the timeline is built backward from it.
Would a HELOC be better than an FHA cash-out?
Neither is better in the abstract. The line wins on cost when the existing loan is good and on flexibility when the money is needed over time; the FHA refinance wins on certainty with one fixed payment, on size with a larger lump sum, and on credit where the line program’s standard is stricter than HUD’s.
Is the FHA Streamline refinance a cash-out option?
The Streamline is a rate-and-term tool for existing FHA loans, not a route to cash. The two programs serve different purposes and are compared at the review when the current loan is FHA.
Should I use an FHA cash-out or a conventional cash-out?
Conventional for cost, FHA for forgiveness. The conventional file is priced on the score through the agencies’ adjustments and carries no premium at the cash-out cap; the FHA file accepts a lower score and tiered ratios and adds the premiums. The written terms settle it.
Equity in a Houston home, insured by HUD and paid in cash.
Three questions open a Houston FHA cash-out: what the home is worth, what is owed, and whether the file fits the conventional program instead. Lendmire answers them, places the file, and writes up the route that fits.
This guide covers Houston — for the statewide guidelines, markets, and scenarios, see FHA Cash-Out Refinance in Texas, part of Lendmire’s FHA cash-out refinance program.
Nearby markets in Texas: Austin · San Antonio · Dallas · Fort Worth · El Paso
Related programs: Cash-Out Refinance · FHA Loans · HELOC