The Quick Read: Any FHA-approved lender can write this loan, and holding an FHA mortgage today does not block you or give you a special lane. FHA insures the loan and does not lend it, so “which banks offer it” really means “which approved lenders will take your file, and on what overlays.” The cash-out reaches 80% LTV on a home you have owned and lived in for 12 months, subject to lender guidelines and full file review.
Who Actually Offers It? Insurer vs. Lender
HUD insures FHA loans. It never lends the money. Any mortgagee HUD has approved can originate one, and the rules sit in HUD Handbook 4000.1, the consolidated FHA single-family policy source.
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.
So the useful question is not “which bank has the product.” Any FHA-approved lender is allowed to write the loan, though not every one chooses to offer it. The useful question is what each lender adds on top of HUD’s baseline. Those additions are called overlays. They can be a higher credit-score floor, a tighter debt-to-income limit, or a longer look at your payment history.
There is no official HUD list of banks that offer FHA cash-out refinances, so this page does not publish one. Banks, credit unions, non-bank lenders and brokers all appear in the market. They differ in overlays and in how they handle odd files, not in the underlying FHA rules.
A broker shops several wholesale lenders and matches the file to the one whose overlays fit. Lendmire works that way. It is a mortgage broker and arranges the loan. It does not lend. Across the wholesale programs it places FHA files with, the starting point is a 580 decision score for maximum financing. Lenders can set their own minimums above that.
What Is an FHA Cash-Out Refinance When You Already Have an FHA Loan?
It is a new, larger FHA mortgage. The new loan pays off the old FHA loan, and you receive the difference in cash. The proceeds are not limited to a specific purpose. The federal consumer-finance regulator describes the tradeoff plainly: a larger mortgage, a payment that may rise, and a payoff date that may move out.
Three things surprise people who already hold an FHA loan:
- The whole balance is repriced, not just the cash portion.
- The old loan’s insurance does not carry over. The new loan has its own mortgage insurance.
- The cash-out is a credit-qualifying loan with an appraisal, not a streamline.
To see how this loan is structured and who it fits, start with Lendmire’s FHA cash-out refinance program page.
How Is the Loan Underwritten, Step by Step?
The same sequence applies at every lender. Overlays change the details, not the order.
1. Choose an approved lender or broker. Your current servicer does not have to be the one that refinances you. Ask any lender whether it writes FHA cash-outs and what its overlays are.
2. Screen the old loan. The lender looks at three things: ownership and occupancy, payment history, and equity. At least one borrower should have owned and lived in the home as a principal residence for the 12 months before the FHA case number is assigned. The payments on the mortgage being refinanced should have been made on time for those 12 months. A late payment inside that window can stop the file.
3. Case number assigned. Several timing tests count back from this date, not from closing.
4. Full appraisal. A cash-out requires one. FHA works from an “adjusted value,” which can differ from the raw appraised figure. The LTV cap applies to the adjusted value.
5. Credit-qualifying underwrite. The file is reviewed for credit, income, assets and debts, usually through FHA’s automated scorecard. Across the wholesale programs Lendmire places with, the base ratio pair is 31/43, meaning housing payment to income and total debt to income. Documented compensating factors can raise those limits to 40/50 at the top tier. The automated finding governs most files.
6. Maximum loan calculation. The base loan is capped at 80% of adjusted value and by the county loan limit. County limits change every year, so check yours rather than relying on a number you saw elsewhere. The financed upfront premium is added on top of the base loan.
7. Payoff and disbursement. The old FHA loan is paid off from proceeds. You receive cash after closing and after any rescission period that applies. As with any consumer mortgage, you receive a Loan Estimate and a Closing Disclosure.
Why the Cap Is 80% (and Was Not Always)
The 80% limit comes from HUD Mortgagee Letter 2019-11, which lowered the cash-out maximum for case numbers assigned on or after September 1, 2019. HUD pointed to the growth in cash-out volume as the reason. A HUD news release notes FHA had also reduced the cap in 2009.
Some borrowers still expect 85%. That figure is out of date. If a lender quotes you more than 80% on a standard cash-out, ask which loan type they mean.
The practical result: a borrower who bought with a low down payment and has 12 months of ownership may still have little cash-out room. After the 80% cap, you must leave at least 20% equity in the home.
FHA Streamline, Rate-and-Term, or Cash-Out?
An existing FHA borrower has three paths. Only one puts real cash in your hand.
| Factor | Streamline | Rate-and-term | Cash-out |
|---|---|---|---|
| Cash back | No meaningful cash | No cash | Yes |
| Appraisal | Not required | Required | Required |
| Credit review | Limited | Full | Full |
| Max financing | Net tangible benefit | 97.75% | 80% LTV |
The streamline needs a net tangible benefit, and the premium continues on the existing loan. The rate-and-term reaches 97.75% on a principal residence occupied for the previous twelve months. The cash-out holds at 80% LTV on a home owned and occupied for 12 months before the case number. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
If you want cash, the streamline is the wrong tool. It cannot give you any. If you only want a different term and don’t need cash, one of the other two may fit better.
What Do Lenders and Overlays Change?
HUD sets the floor. Lenders set their own rules above it. Across the wholesale programs Lendmire works with, 580 is the starting decision score for maximum financing, and HUD’s lower 500–579 tier is not reached. Lenders may set a higher floor, a lower ratio limit, or a stricter view of any late payment.
Here is how the main lender types usually differ on what you should ask:
| Lender type | What to ask |
|---|---|
| Banks | Do you write FHA cash-outs, and what overlays apply? |
| Credit unions | Do you offer FHA, and to non-members? |
| Non-bank lenders | What is your credit-score floor? |
| Brokers | Which wholesale lenders will review my file? |
That table describes categories, not named companies. The best fit for you depends on your credit profile, equity, payment history and how clean the paperwork is.
Questions to put to any lender
- Are you FHA-approved, and do you originate FHA cash-outs?
- What minimum decision score do you require?
- What debt-to-income limit do you apply, and do you use compensating factors?
- How do you treat a late payment in the last 12 months?
- Do you apply any overlay on appraisal or property type?
- Which costs sit on the Loan Estimate, and which can change?
Where the General Rule Breaks
A few cases that change the answer:
- Second homes and rentals. Standard FHA cash-out is for principal residences only. Occupancy decides the leverage, and a non-owner-occupied home is outside this product.
- Free-and-clear homes. An older HUD reference guide says a home owned outright can be refinanced as a cash-out. It also says an inherited home can qualify if you have lived in it since the inheritance. Treat this as the concept only, because that guide is archived and its leverage numbers are old.
- Forbearance history. A borrower who completed a forbearance plan generally needs a stretch of consecutive on-time payments afterward before a cash-out is possible. That comes from Mortgagee Letter 2020-30. Check the current handbook for how it applies today.
- Non-occupant co-borrowers. A non-occupant co-borrower is allowed on an FHA purchase. On a cash-out, the HUD reference says one cannot be added just to meet credit guidelines. Ask the lender how it treats their income.
- Manufactured homes. These carry separate restrictions. Ask early.
- Divorce or death. FHA allows a borrower to come off the loan and title in these cases, with documentation requirements. Confirm the current handbook language with your lender.
- Credit events. HUD’s waiting periods are two years from a chapter 7 discharge and three years from a foreclosure. Those are HUD’s rules, not a promise from any lender.
What Does the Premium Do to Your Costs?
A cash-out is a new FHA loan, so it carries new mortgage insurance. Across the programs Lendmire places, the upfront premium is 1.75% of the base loan and can be financed. HUD Mortgagee Letter 2023-05 states the same upfront figure and lowered annual premiums for loans endorsed from March 20, 2023.
The annual premium runs between 0.15% and 0.75% of the balance, depending on term, loan amount and LTV. On a thirty-year loan above 90% LTV, it lasts for the term. At 90% LTV or below, it ends after eleven years. A cash-out at 80% LTV sits in the second group, but confirm that against the lender’s quote. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Closing costs apply to the whole new balance, not just the cash. Nothing here is a price. Your Loan Estimate shows the real numbers.
Is Cash-Out the Right Move?
The CFPB’s research on cash-out borrowers found that many used the cash to pay down credit card and auto debt.
Read that as a caution. Paying off card debt with home equity swaps unsecured debt for a debt secured by your house. If the cards fill up again, you carry both.
Compare the options before deciding:
| Option | What changes |
|---|---|
| FHA cash-out | One new, larger loan; new premium |
| Keep current loan | No change to rate or term |
| Home equity loan or HELOC | Adds a second lien and payment |
A cash-out replaces your mortgage. A home equity loan or line leaves your first mortgage alone and adds a second payment. Which one costs less depends on your current loan, your equity and your plans.
Key Terms Defined
Adjusted value: The value FHA uses to apply its LTV cap, which can differ from the raw appraised value.
Case number: The FHA number assigned to your loan file; several timing tests count back from its date.
Overlay: A rule a lender adds on top of HUD’s minimum, such as a higher credit-score floor.
Net tangible benefit: The measurable gain an FHA streamline must show, such as a lower payment or a move to a more stable loan.
Upfront premium: The one-time FHA mortgage insurance charge, 1.75% of the base loan, which can be financed.
A Note on “FACOP” and Look-Alike Offers
You may see “FACOP” used as a label for this product. It is not an official HUD program name. Treat any offer that leans on a made-up acronym, implies approval is certain, or asks for payment before a Loan Estimate with caution.
Frequently Asked Questions
Do I need an existing FHA loan to get an FHA cash-out refinance?
No. A borrower with a conventional or other mortgage can refinance into an FHA cash-out, and so can an owner with no mortgage. The home must be your principal residence, owned and occupied for the 12 months before the case number, and the 80% LTV cap and full underwriting apply either way. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Can an FHA Streamline give me cash?
No. The streamline is built for a net tangible benefit with no appraisal and a limited credit review. It does not provide meaningful cash. If you want cash back, you need the cash-out path with a full appraisal and credit-qualifying underwrite.
How much can I borrow?
Up to 80% of the adjusted value, and not above the county loan limit. County limits change every year, so ask your lender for the current one. Subject to lender guidelines and full file review.
Will a late payment stop the refinance?
Yes, it can. Lenders check that payments on the mortgage being refinanced were made within the month due for the previous 12 months. A late payment inside that window is a common reason files get declined or sent to manual review. Lender overlays vary on how strictly they apply it.
Why do some lenders quote a higher credit-score floor than others?
Overlays. HUD sets a baseline and each lender chooses whether to add stricter rules. A broker that shops several wholesale lenders can match your score and file to one whose floor fits. Lendmire’s network starts at a 580 decision score for maximum financing, and nothing here is a commitment to lend.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges FHA, VA, conventional and jumbo home purchase and refinance financing in 16 states through wholesale lenders. Every option is subject to the lender’s guidelines and full underwriting. 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 Handbook 4000.1, FHA Single Family Housing Policy Handbook
2. CFPB
3. HUD Mortgagee Letter 2019-11
4. HUD news release on cash-out refinance risk
5. HUD HOC Reference Guide, Refinances
7. HUD Mortgagee Letter 2023-05
8. CFPB’s research on cash-out borrowers
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 Requirements With No Mortgage · Best FHA Cash-Out Refinance Program on a Paid-Off Home With No Mortgage · How a Conventional Cash-Out Replaces FHA Mortgage Insurance
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
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- 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.