The Quick Read: There is no fixed list of banks, because FHA is one federal program that any FHA-approved mortgage company can offer. That includes banks, credit unions, and non-bank lenders. Already having an FHA loan does not block you, and it is not a requirement either. What decides approval is your equity, your payment history, and each lender’s own added rules.
Key Takeaways
- An FHA cash-out refinance replaces your whole first mortgage with a new, larger one, and you take the difference in cash.
- The new loan can reach 80% of your home’s adjusted value. Your payoff, any second lien, and financed costs all come out of that 80% before cash reaches you.
- You generally need to have owned and lived in the home for 12 months before the case number is assigned.
- An FHA Streamline is not a cash-out loan. It skips the appraisal and gives no meaningful cash.
- Lenders set their own overlays on top of HUD’s minimums, so two lenders can answer the same file differently.
Who Actually Offers This Loan?
Any FHA-approved lender can originate an FHA cash-out refinance. HUD does not publish a ranked list of banks, and none exists in the program itself. The loan is the same product everywhere. The lender’s guidelines around it are what differ.
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.
Most borrowers meet four kinds of lender:
| Lender type | What it usually does | What to check |
|---|---|---|
| Bank | Offers FHA through a mortgage unit | Whether it keeps or sells servicing |
| Credit union | Offers FHA at some institutions | Whether FHA cash-out is on its menu |
| Non-bank lender | Often FHA-focused | Its credit and ratio overlays |
| Mortgage broker | Shops several wholesale lenders | Which lenders fit your scenario |
Lendmire is a mortgage broker, not a lender. One lender may want a higher credit score than another for the same cash-out. A broker’s job is to match the file to the lender whose overlays it fits. The best program for your situation depends on your credit, equity, and documentation, not on a brand name.
Does an Existing FHA Mortgage Help or Hurt?
Having an FHA loan neither qualifies nor disqualifies you. An FHA cash-out can pay off any first mortgage: FHA, conventional, VA, or even a home owned free and clear. So the existing FHA loan is just the balance to be paid off.
What the existing loan changes is your choice of tools. As an FHA borrower you can pick among three refinance paths:
| Factor | FHA Streamline | FHA rate-and-term | FHA cash-out |
|---|---|---|---|
| Cash to borrower | No meaningful cash | Limited to payoff and costs | Yes |
| Appraisal | None | Required | Required |
| Credit review | Limited | Full | Full |
| Leverage reach | Not value-based | Up to 97.75% | Up to 80% |
| Existing FHA loan needed | Yes | No | No |
Those leverage figures come from the wholesale programs Lendmire places files with: the rate-and-term reaches 97.75% on a principal residence occupied for the previous twelve months, and the cash-out reaches 80% of value on a home owned and occupied for 12 months before the case number. The Streamline requires a net tangible benefit, and the mortgage insurance premium continues.
Here is the trade-off an existing FHA borrower should weigh. A cash-out replaces the entire first mortgage. Your current terms go away, including the balance, the term, and the way the old loan’s mortgage insurance was set up. You get a fresh loan with a new insurance schedule that applies to the whole new balance. If your current loan is in good shape and you only need a modest sum, a Streamline plus a separate home equity product can sometimes cost less than resetting everything. Other times the single cash-out loan is simpler. It is a genuine judgment call, and it depends on what your current loan looks like and how much cash you need.
How the Loan Is Underwritten, Step by Step
1. Equity check. The lender applies the 80% cap to the adjusted value of the home, not just a rough guess of price. HUD Mortgagee Letter 2019-11 lowered the maximum loan-to-value on cash-out refinances to 80 percent of adjusted value for case numbers assigned on or after September 1, 2019. Older guides that say 85% or 95% are out of date.
2. Case number and seasoning. The lender orders the FHA case number. Your 12 months of ownership and occupancy are counted back from that date.
3. Payment history. You document on-time payments on the existing mortgage. Late payments get scrutiny. If you came out of a forbearance plan, HUD’s handbook update says fewer than three consecutive monthly housing payments since the plan ended pushes the file to manual underwriting, per the Handbook 4000.1 Update 15 transmittal.
4. Appraisal. A full appraisal is required. This is the main contrast with a Streamline.
5. Credit and income review. The file runs through automated underwriting, or manual underwriting if the system refers it. The base ratio pair is 31/43 (housing to total), and documented compensating factors can reach 40/50 at the top tier. The automated finding governs most files. Manual files need more paper.
6. Title and closing. Title is cleared, the Loan Estimate and Closing Disclosure go out, and you sign.
7. Rescission window and funding. On a refinance of your primary home you have until midnight of the third business day to cancel, as the CFPB explains. Saturdays count. Sundays and legal public holidays do not. Cash is disbursed after that window ends.
How Much Cash Can You Actually Take?
The new loan can reach 80% of adjusted value. That is a ceiling on the entire loan, not on the cash. Think of it as a budget with several claims on it.
Start with 80% of the home’s value. Subtract your current payoff. Subtract any second lien that must be paid. Subtract the costs you choose to finance, including the upfront mortgage insurance premium. What is left is your cash.
Run it in words for a homeowner with a mortgage balance equal to about 60% of the home’s value. The 80% ceiling leaves roughly a fifth of the value, which is the gap between the balance and the ceiling. From that gap, the upfront insurance premium and other financed costs come out first. The cash you see is therefore smaller than the gap itself. Ask any lender for the net figure, not the headline gap.
Appreciation helps because it raises the value. It does not shorten the ownership wait.
What Mortgage Insurance Does on a Cash-Out
FHA mortgage insurance applies to the whole new balance, not just the cash portion. Across the programs Lendmire places, there are two pieces. First is an upfront premium of 1.75% of the base loan, which is usually financed. Second is an annual premium of between 0.15% and 0.75% of the balance, set by term, loan amount, and LTV.
Duration depends on LTV and term. On a thirty-year loan above ninety percent LTV, the annual premium lasts for the term. At or below ninety percent it ends after eleven years. Because a cash-out tops out at 80%, it falls in the at-or-below-ninety-percent tier, so the annual premium ends after eleven years on a thirty-year loan. HUD sets the schedule in Mortgagee Letter 2023-05. Your lender confirms the exact tier on your file.
This is the main cost difference from a conventional cash-out. Conventional also caps at 80%, so FHA does not give you more money. HUD said at the time that the cap aligns with the maximum cash-out LTV allowed by the government-sponsored enterprises and was meant to strengthen equity and reduce loss severity if a loan defaults. FHA’s real advantage is credit flexibility, not leverage. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Where the General Rule Breaks
Owned less than 12 months. Standard cash-out is generally off the table. Recent buyers who want cash from a new purchase usually have to wait out the seasoning clock.
Owned free and clear. You can still do a cash-out. There is just no payoff to subtract.
No mortgage on the home. HUD’s handbook update notes that cash-out can apply where no mortgage previously existed.
Three- and four-unit homes. Standard FHA cash-out is for an owner-occupied principal residence, and an owner-occupied property of up to four units can fit that description. Lenders may apply extra tests to larger multi-unit properties, so confirm the current handbook terms and the lender’s own guidelines before counting on this.
Second home or rental. A second home or a rental does not qualify, so occupancy decides eligibility before leverage is ever discussed.
Non-occupant co-borrower. Their income cannot be used to qualify on a cash-out, even though a non-occupant co-borrower can help on a purchase.
Hawaiian Home Lands. The 80% cap does not apply to Section 247 mortgages, per the same HUD letter.
Recent forbearance. Covered above. Manual underwriting applies until you rebuild three consecutive payments.
Credit score floor. HUD sets a minimum, and lenders can set higher ones. Expect a lender’s overlay to sit above HUD’s bare minimum. The wholesale programs Lendmire places FHA loans with start at a decision score of 580 on purchase files. For a cash-out, no single floor is stated here, because each lender sets its own guideline and reviews your file against it. Subject to lender guidelines and full file review.
Why the Same Borrower Gets Different Answers
Overlays. HUD writes the floor. Each lender writes the fence above it. A lender may want a higher score, tighter ratios, or more paperwork on manual files. It may also decline a scenario another lender writes without trouble.
That is why one bank’s “no” is not a verdict on your file. It is a verdict on that bank’s appetite.
Questions worth asking any lender:
- Do you originate FHA cash-out refinances, or only Streamlines and purchases?
- What credit score do you require, and is it higher than HUD’s minimum?
- What ratios do you allow, and when do you send a file to manual underwriting?
- Will you keep servicing the loan or sell it?
- What does the Loan Estimate show for the upfront premium and financed costs?
- How do you treat a recent forbearance or late payment?
A broker can ask these across several wholesale lenders at once. A single bank can only answer for itself.
Cash-Out Versus the Alternatives
A cash-out refinance is a new, larger mortgage. It pays off the current loan and you take the rest in cash. The payment may rise and the payoff may stretch out, as the CFPB’s home equity guide explains in plain terms.
| Option | First mortgage | Best when |
|---|---|---|
| FHA cash-out | Replaced | You need a larger sum and your credit needs FHA flexibility |
| Conventional cash-out | Replaced | Your credit and equity fit conventional guidelines |
| Home equity loan | Kept | Your current loan is worth keeping |
| HELOC | Kept | You want a draw line instead of a lump sum |
The trade-off is plain. A cash-out replaces the loan you have. A home equity loan or HELOC leaves the first mortgage alone, which matters if your current terms are good.
Be careful with debt consolidation. A CFPB report found that cash-out borrowers often use proceeds to pay down credit card and auto debt, and that credit scores rose in the quarter after the refinance. Moving unsecured debt into a mortgage puts your home behind it. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
What to Prepare
Cleaner files get fewer questions. Gather these before you apply:
- Your latest mortgage statement showing the payoff and payment history
- Proof of ownership and occupancy for the past 12 months
- Pay stubs, W-2s, and tax returns for the income documentation the lender requests
- Homeowners insurance information
- Letters of explanation for any late payment or forbearance
- A list of any second liens or judgments against the property
County loan limits apply and change every year, so ask your lender how they affect your file.
Key Terms Defined
Cash-out refinance: A new mortgage larger than your current balance, with the difference paid to you in cash.
Seasoning: The required period of ownership and occupancy before a loan is allowed, measured here back from the FHA case number date.
Overlay: A lender’s own rule that sits on top of the agency minimum, such as a higher credit score floor.
LTV (loan-to-value): The new loan amount as a percentage of the home’s adjusted value.
Adjusted value: The value FHA uses to apply its cap, which is not always the same as the raw appraisal figure.
Streamline refinance: A refinance of an existing FHA loan with no appraisal and limited credit review that does not provide meaningful cash.
Your Decision, in Practice
Start with the amount you need. If it is small and your current FHA loan is in good shape, price a Streamline against a separate home equity product. If it is larger, or you want one clean loan, the cash-out is the tool. Then check the clocks: 12 months of ownership and occupancy, and a clean payment record. Then compare the net cash across lenders, not the headline.
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches. Reach the team at 828-256-2183, or request a quote to start a review. Lendmire arranges these loans through wholesale lenders in the 16 states where it is licensed for consumer lending, and nothing here is a commitment to lend.
Frequently Asked Questions
Do I need an existing FHA loan to get an FHA cash-out refinance?
No. The new FHA loan can pay off a conventional, VA, or free-and-clear home. An existing FHA loan only means you also have Streamline and rate-and-term options to compare. Whichever path you choose, the lender reviews your file under its own guidelines.
How much of my home’s value can I borrow?
Up to 80% of adjusted value, covering the whole new loan. Your payoff, any second lien, and financed costs come out of that figure first, so your cash is the remainder. The cap was cut to 80% for case numbers assigned on or after September 1, 2019, per HUD Mortgagee Letter 2019-11.
Can an FHA Streamline give me cash?
Not in any meaningful amount. A Streamline skips the appraisal and the full credit review, which is why it cannot be used to pull equity. If you need real cash, the cash-out loan with a full appraisal is the product.
How long must I own the home first?
Generally 12 months of ownership and occupancy before the FHA case number date. Passing that mark is necessary but not enough on its own. Credit, ratios, payment history, and the 80% cap still apply, and lenders may add overlays.
Can I cancel after I sign?
Yes, on a refinance of your primary home. You have until midnight of the third business day after the rescission clock starts, which requires the signed note, two copies of the notice, and the disclosures. The CFPB’s rescission guidance covers the details. Purchase loans do not carry this right.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and home buyers in 16 states with FHA, VA, conventional and jumbo purchase and refinance loans arranged through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and the agency guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. HUD Mortgagee Letter 2019-11
2. HUD Handbook 4000.1 Update 15 transmittal
3. CFPB: when does the right of rescission start
4. HUD Mortgagee Letter 2023-05
7. CFPB: CFPB Report Finds Cash Out Mortgage Refinance Borrowers Improve Credit Scores
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: How Much a Couple on One Mortgage Gets From FHA Cash-Out or VA Cash-Out · How Much an FHA Cash-Out Lends After a Listing With a Low Mortgage · Banks That Offer an FHA Cash-Out Refinance to Tap Equity on an FHA-Insured Home
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.