The Quick Read: Child support income does not change how much cash you can take out. It only helps you qualify for the loan. The cash comes from the equity ceiling: HUD caps an FHA cash-out loan at 80% of the home’s adjusted value, and the payoff of your current mortgage and the closing costs come out of that amount first. Support income can mean the difference between approval and denial, but it is never a dial that makes the check bigger.
What Actually Sets the Cash Amount?
Two ceilings decide your cash: one based on equity, one based on income. You get whichever is lower.
FHA cash-out estimate
Seeded with an example value, a balance to match, and a round cash request; change any field.
Editable benchmark: 7.18% as of November 5, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not an FHA cash-out refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $193,000 current balance, the FHA cap on a principal residence with the upfront premium financed, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. 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 on top of the capped base loan; 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.
The first ceiling is equity. HUD Mortgagee Letter 2019-11 set the maximum loan-to-value (LTV) and combined LTV at 80% of the property’s adjusted value on FHA cash-out refinances. The older cap was 85%. HUD’s announcement described the change as a reduction in cash-out lending limits. Across the wholesale programs we place files with, the FHA cash-out reaches 80% LTV on a home you have owned and lived in for 12 months before the case number. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The second ceiling is income. Your monthly debts, including the new payment, must fit inside the debt-to-income (DTI) ratios the program allows. If the loan you want fails DTI, the cash request has to shrink, or the file does not work at all.
Here is the formula in words:
- Start with 80% of the adjusted value.
- Subtract the payoff of your current mortgage and any other liens.
- Subtract the closing costs and prepaid items you finance.
- What remains is the most cash you can receive, before the income ceiling is applied.
Child support touches only the second ceiling. It helps the DTI pass. It never adds equity on its own, because only changes that may support a higher appraised value, depending on comps and underwriter review, can do that, and nothing lifts the 80% cap.
How Does Child Support Fit Into the Picture?
Child support works as qualifying income. It raises the income side of your DTI, which can let a loan pass that would otherwise fail.
HUD’s Handbook 4000.1 glossary defines alimony, child support and maintenance income as income received from a former spouse or partner, or from a non-custodial parent of the borrower’s minor dependent. Lenders treat it as stable income only when the file proves it.
Think of a borrower whose wages alone put DTI just above the allowed limit. Adding documented support income can move the ratio back inside the limit. The loan is now approvable. But the amount of cash is the same as it would be for a neighbor with identical equity and no support income. That is the point of the title question: support income opens the door, and the equity decides how much you carry through it.
There is one indirect effect worth knowing. When DTI is tight, a larger loan means a larger payment. If support income is the only thing keeping you inside the limits, the payment may cap the cash before equity does. In that case, the income ceiling is the lower one, and you size the request down to fit.
What Does a Lender Need to Count Support Income?
The income must be documented and likely to continue. Continuance is the test where support income can fall short.
Under HUD guidance, lenders generally look for the following:
- A legal document. A divorce decree, separation agreement, court order or voluntary payment agreement. The lender needs a fully executed copy, and often the front page plus the pages showing the financial terms.
- Proof of receipt. Recent bank-statement deposits, canceled checks or records from the child support agency. Expect the lender to ask for a few months of history.
- Continuance. The payments must be likely to keep arriving for at least three years going forward. The exact start date of that clock is set by the current HUD Handbook and the lender’s review, so check with your loan officer.
A child’s age matters most for the continuance test. Suppose a court order ends when your child turns 18, and the child is 16 and a half. Fewer than three years remain, so the lender cannot count the income. The loan can still go forward if your other income carries the DTI, but the support does not help.
If support has not arrived steadily, lenders may average the income over a longer stretch rather than use the current amount. A late or missed pattern can shrink how much of the income counts. It does not touch the 80% cap.
Voluntary support with no court order is harder. The paper trail is thinner, and lenders typically want a longer proven history. If your support is informal, expect more questions.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Do You Have to Disclose Child Support?
The CFPB explains that a lender or broker may ask about support income only if you want it counted, and if they ask, they must tell you that you do not have to reveal it. The agency covers this in its page on whether a lender or broker can ask about alimony or child support. The same rule says that when you do rely on these payments, the lender must weigh them to the extent they are likely to be consistently made.
So if your other income already covers the loan, support can stay out of the file. If you need it to pass DTI, you provide it and the paperwork above.
What If You Pay Child Support Instead of Receiving It?
Paid support is a debt, and it works against you. HUD treats child support a borrower must pay as a recurring liability that goes into the monthly obligations the lender counts. That pushes DTI up and can reduce how large a loan fits.
| Situation | Effect on DTI | Effect on the 80% equity cap |
|---|---|---|
| You receive documented support | Income goes up, DTI improves | None |
| You pay court-ordered support | Debt goes up, DTI worsens | None |
| You both pay and receive | Both count separately | None |
| Support ends within three years | Income cannot be used | None |
In every row, the equity cap is untouched. Only the income ceiling moves.
A Worked Example Without Dollar Figures
Picture two homeowners with the same home, the same mortgage balance and the same appraisal. Both want to take cash out.
Their equity ceiling is identical: 80% of adjusted value, less the payoff, less financed costs. Say it works out to the same maximum for both.
Homeowner A has wages plus documented child support with years left on the order. Homeowner B has the same wages and no support income.
- Homeowner A passes DTI at the full requested amount and can take cash up to the equity ceiling.
- Homeowner B may fail DTI at that same amount. B either borrows less, adds a co-borrower, pays down other debts, or looks at a different program.
The cash ceiling from equity is the same. The difference is whether the income can support that much loan. Support income did not make A’s check bigger than the equity formula allows. It made the full amount reachable.
A low appraisal hurts both. Because the 80% applies to adjusted value, a lower value shrinks the cap and the cash, however strong the income is.
What Else Reduces Your Cash?
Several items come out of the proceeds before any money reaches you:
- Payoff of your current first mortgage and any other liens on the home.
- Closing costs and prepaid items you choose to finance.
- The upfront mortgage insurance premium, typically financed into the balance.
An annual premium also applies, between 0.15% and 0.75% of the balance depending on term, loan amount and LTV. Because a cash-out loan is capped at 80% LTV, the rule that ties the premium to the full loan term applies only above 90% LTV and does not come into play. At or below 90% LTV, the annual premium ends after eleven years on a thirty-year loan. Your specific schedule is something the lender confirms on the Loan Estimate. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Other liens that remain on the home count toward the cap too. A second mortgage you keep eats into the 80% before you see a dollar.
Who Qualifies for the Standard Program?
Standard FHA cash-out is for a primary residence you have owned and occupied for 12 months before the case number. Second homes and investment properties do not fit the standard program. Lenders also expect a clean recent payment history on the mortgage being refinanced, so a string of late payments can stop the file.
A few more points from the program envelope:
- The base debt ratios are 31/43 (housing to total income) with no compensating factors.
- Documented compensating factors can reach 40/50 at the top tier, and the automated finding governs most files.
- Wholesale programs we place FHA loans with start at a 580 decision score.
- County loan limits apply and change every year, so check the current limit for your county.
Everything here is subject to lender guidelines and full file review. None of it is a commitment to lend.
Key Terms Defined
Adjusted value: The appraised value as HUD adjusts it for the loan, which is the number the 80% cap applies to.
Combined LTV (CLTV): The total of all loans against the home, divided by its value.
Debt-to-income ratio (DTI): Your monthly debts divided by your gross monthly income.
Continuance: The lender’s test that support income is likely to keep coming for at least three years.
Net cash: What you receive after the payoff, liens and financed costs come out of the new loan.
Upfront premium: The one-time FHA mortgage insurance charge, 1.75% of the base loan, usually financed.
How Does FHA Cash-Out Compare With Other FHA Refinances?
| Feature | FHA cash-out | FHA rate-and-term | FHA Streamline |
|---|---|---|---|
| Takes cash out | Yes | No | No |
| Maximum LTV | 80% | 97.75% on a primary residence | No appraisal, existing FHA loan |
| Occupancy history | 12 months owned and lived in | Previous 12 months | Existing FHA loan required |
| Income test | Full DTI review | Full review | Limited credit review |
If you only want a different term or payment and no cash, the other refinances may fit better.
Common Mistakes With Support Income
1. Assuming support raises the cash. It raises approval odds, not the equity ceiling.
2. Ignoring the child’s age. If the order ends in under three years, the income may not count.
3. Relying on an informal arrangement. No order and no deposit trail means a hard conversation.
4. Forgetting paid support. If you pay support, it counts against you as a debt.
5. Treating 80% as the cash you receive. It caps the whole new loan, so the payoff comes out first.
6. Expecting a better credit score to lift the cap. The 80% cap is the same regardless of score; score affects eligibility and mortgage insurance, not that ceiling.
Gather These First
Before you apply, pull together:
- The decree, order or agreement, complete and signed.
- Bank statements showing support deposits.
- Records from the child support agency, if payments run through one.
- Your child’s birth date, so you can count the years left on the order.
- Your current mortgage statement and any second-lien statements.
Frequently Asked Questions
Does child support increase how much cash I can take out of my home?
No. The cash is set by 80% of adjusted value minus your payoff, liens and financed costs. Support income only helps your debt-to-income ratio pass. If your DTI is already fine, adding support changes nothing about the cash.
Can I leave child support off my application?
Yes. A lender or broker must tell you that you do not have to reveal support income if they ask about it. Use it only if you need it to qualify. If you do use it, expect to document it fully.
What if my child support order ends in two years?
Lenders generally need support to continue for at least three years, so the income likely cannot be counted. The loan can still move forward if your other income carries the DTI. Your loan officer can confirm how the continuance clock is measured under the current HUD Handbook.
Does the 80% limit apply to every FHA loan?
It applies to standard FHA cash-out refinances on a primary residence. There is a rare exception for loans insured under Section 247, which covers Hawaiian Home Lands. An FHA Streamline and a rate-and-term refinance follow different rules.
For your own numbers, request a scenario review with Lendmire.
For current guidelines and terms, see Lendmire’s FHA loan programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Lendmire arranges FHA, VA, conventional and jumbo purchase and refinance loans through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. HUD Mortgagee Letter 2019-11
2. HUD press release on cash-out lending
3. HUD Handbook 4000.1 Glossary
4. CFPB: Can a lender or broker ask about alimony or child support
This article is part of Lendmire’s FHA cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: FHA Cash-Out Refinance vs Conventional Cash-Out When Child Support Counts as Income · How Much Cash Comes Out of an FHA Cash-Out Refinance for Repairs Without a Contractor? · How Much Cash Comes Out of an FHA Cash-Out Refinance to Cover a Medical Bill?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.