The Quick Read: No. An FHA cash-out refinance cannot go above the FHA mortgage limit for the home’s county and unit count, no matter how much equity the home has. The loan also has to fit under a separate cap of 80% of the home’s adjusted value, and the lower of the two ceilings controls. For most homeowners the 80% test binds first. The county limit decides the outcome mainly on higher-priced homes.
What Is the County Loan Limit, and Who Sets It?
HUD sets FHA loan limits, not the state and not the lender. The limits are published by county and by unit count, and they change every year. Across the wholesale programs Lendmire places FHA files with, the first step on any cash-out file is pulling the limit for the property address.
The limit applies to the loan amount. It does not apply to the home’s value or what you paid for it. A home can be worth far more than the limit and still be perfectly eligible for FHA. The new loan just has to fit under the ceiling.
There are three tiers to understand:
- The floor. Most counties sit at the minimum limit, which HUD sets as a share of the national conforming limit, per HUD’s published mortgage limits.
- High-cost counties. Where local median home prices are above the floor, FHA sets a higher limit based on those prices, up to a ceiling.
- Special exception areas. Alaska, Guam, Hawaii and the U.S. Virgin Islands can run higher than the standard ceiling.
Limits rise with unit count, so a duplex has a higher limit than a single-family home in the same county. Owner-occupancy still applies to every unit count, one to four.
County dollar figures are not quoted here because they change each year. Use HUD’s FHA mortgage limits lookup for the exact number. The CFPB advises setting the limit type to “FHA Forward” and choosing the current limit year, per its consumer guidance on FHA county limits. Limits are tied to the date the FHA case number is assigned, so a new calendar-year limit applies to new case numbers.
What Are the Two Rules That Cap Your Cash-Out Loan?
Every FHA cash-out loan has to pass two separate tests. The loan is the lesser of the two ceilings.
Gate one: the value cap. Under the FHA cash-out refinance program, the new loan reaches 80% LTV on a home owned and occupied for 12 months before the case number. That cap came from HUD Mortgagee Letter 2019-11, which cut the maximum from 85% to 80% for case numbers assigned on or after September 1, 2019. HUD said the change lined the cap up with the Fannie Mae and Freddie Mac cash-out limit, per its announcement of the change. Before that, FHA cash-out went as high as 95% years earlier, then 85%. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Gate two: the county limit. The first mortgage, plus any second liens that stay in place, has to fit under the county limit for that unit count.
The loan is sized on the lower number. Nothing about the county limit stretches because equity is high.
When Does the County Limit Actually Bind?
Rarely. For most homes, 80% of value comes in under the county limit, so the value cap decides.
Here’s the catch for higher-priced homes. Once a home’s value gets large enough, 80% of it would be more than the county allows. At that point the county limit becomes the binding constraint, and the homeowner gets less than 80% of value.
Run it as a comparison, using percentages only:
| Situation | Which cap binds | What it means |
|---|---|---|
| Moderate value, floor county | 80% value cap | Loan sized at 80% LTV |
| High value, floor county | County limit | Loan stops at the limit, below 80% LTV |
| High value, high-cost county | Usually the value cap | The higher limit leaves room for 80% |
| Value near the crossover | Both are close | Small appraisal changes swing which one wins |
Two homes with identical value and equity can get different answers in different counties. The one in a floor county hits the ceiling first. The one in a high-cost county may not.
The crossover point is simple arithmetic. Divide the county limit by 0.80 and you get the home value where the county limit starts to bind. Below that value, the 80% cap decides. Above it, the county limit decides. That’s a calculation, not a published HUD figure, so treat it as an illustration and let the lender confirm the real numbers on your file.
Does “Exceeding the Limit” Mean Jumbo on an FHA Loan?
No, and this is the terminology trap that confuses most searchers. On conventional loans, going above the conforming limit pushes you into a jumbo loan. That’s the answer almost every search result gives, and it does not transfer to FHA.
FHA has no jumbo product that lifts the county ceiling. People use “FHA high-balance” to describe loans above the standard floor but still within the county’s higher limit. That is a different thing from exceeding the county limit.
| Term | Conventional | FHA |
|---|---|---|
| Base limit | Conforming limit | County floor |
| Above the base | Jumbo loan | High-cost county limit (still capped) |
| Above the county ceiling | Jumbo, different underwriting | Not available on FHA |
If a loan would exceed the county limit, FHA is not the product. The borrower needs a lower loan amount or a non-FHA loan.
How Do Existing Liens Count Toward the Cap?
The cap is measured on combined debt, not just the first mortgage. The new first mortgage plus any subordinate liens that remain cannot exceed the county limit. The 80% value cap applies to both the loan-to-value and the combined loan-to-value.
So a second lien does not open a path above the cap. A home equity line or second mortgage that stays in place uses up room under the same ceilings. Some lenders count a HELOC at its full credit limit rather than the drawn balance. That treatment varies by file, so ask the loan officer how a line will be counted before you plan around it.
Payoff matters too. On a cash-out refinance, the new loan replaces the existing first mortgage. The lender documents payoff statements, and whatever is left after payoff and costs is the cash you receive. A larger payoff means less cash out under the same ceiling. That differs from a home equity loan or HELOC, which leave the first lien in place, as the CFPB’s research blog on cash-out refinances explains.
What Does the File Look Like Step by Step?
A cash-out file runs in a set order. Skipping steps is how files get kicked back.
1. Confirm eligibility. The home must be your principal residence, owned and occupied for 12 months before the case number. Second homes and investment properties are not eligible for FHA cash-out.
2. Look up the county limit for the address and unit count.
3. Order a full appraisal. The appraised value is adjusted under HUD rules to get the adjusted value that the 80% cap uses.
4. Compute both ceilings. Take 80% of adjusted value, then compare it to the county limit minus any liens staying in place. The lower number is your maximum.
5. Document the payoffs on the existing mortgage and any liens being paid.
6. Run full credit and income underwriting. This is a full-documentation loan, not a streamline.
The ratios behind that underwriting start at 31/43 with no compensating factors. Documented compensating factors can reach 40/50 at the top tier, and the automated finding governs most files. Pricing and available terms vary by lender, borrower profile, property type, and full underwriting review. Every figure is subject to lender guidelines and full file review.
On mortgage insurance, the upfront premium is 1.75% of the base loan, financed into the balance. The annual premium runs between 0.15% and 0.75% of the balance depending on term, amount and LTV. On a thirty-year loan above ninety percent LTV it lasts for the term. At or below ninety percent it ends after eleven years. Because the 80% cap keeps cash-out under ninety percent, that second case is the one that usually applies. Whether the upfront premium sits inside or outside the county-limit test is a point to confirm with the lender on your specific file.
What Can You Do If the Limit Blocks the Amount You Want?
Start with the decision. Is the loan you need under the limit? Then proceed. Over it? Then you have these options:
- Take less cash. Lowering the loan amount to fit under the ceiling is the simplest path. The cost is the cash you leave on the table.
- Switch loan type. A conventional or jumbo cash-out refinance has different limits and different overlays. Equity that a county limit blocks on FHA may fit elsewhere. Those loans carry their own credit, reserve and leverage standards.
- Leave an existing second lien alone. If a second lien is staying, it counts against the cap. Paying it off with the new loan changes the math, so compare both versions.
- Consider a different product altogether. A HELOC or home equity loan leaves the first lien in place and uses different limits.
- Reassess when limits change. Limits reset each calendar year by case number date. A home near the line may fit after an update, though that is no guarantee.
There is no workaround that pushes an FHA loan past the county limit. Anyone who tells you otherwise is describing a different loan.
One more practical point. Lenders can layer their own rules on top of HUD’s. Some set a higher credit floor, a minimum loan amount, or longer waiting periods before they will lend. That is why two lenders can give different answers on the same property. A broker who works with several wholesale lenders can compare those overlays instead of leaving you with one lender’s answer. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Weigh the budget side before borrowing against equity. A bigger balance plus mortgage insurance raises the monthly cost even when the interest rate is lower. The CFPB’s research on cash-out refinances and debt paydown notes that converting unsecured debt into mortgage debt can put the home at risk if payments become hard to make. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Key Terms Defined
Adjusted value: The appraised value after HUD’s adjustments. The 80% cap is measured against it.
County loan limit: The maximum FHA loan amount HUD allows for a county and unit count.
Combined loan-to-value (CLTV): The first mortgage plus all other liens, divided by value.
Case number: The FHA identifier assigned to a loan. Its date determines which year’s limits apply.
High-cost county: A county where local median prices push the limit above the floor.
Upfront premium: The one-time FHA mortgage insurance charge, financed into the loan.
Frequently Asked Questions
Does a higher home value raise my FHA loan limit?
No. The limit depends on the county and unit count, not on what the home is worth. A more valuable home can actually hit the county limit sooner, which cuts the cash you receive.
Is an FHA jumbo loan the same as a conventional jumbo?
No. Conventional jumbo loans sit above the conforming limit and carry their own underwriting. FHA has no product above the county ceiling. “High-balance” on FHA means above the floor but still within the county’s higher limit.
Do limits differ for a duplex or fourplex?
Yes. The county limit rises with each unit, up to four. You still have to live in the property as your principal residence, and the 80% value cap still applies.
Can I refinance a loan that is already above the county limit?
Not into a new FHA cash-out loan. The new loan must fit under the current county limit, and the value cap must also be met. If the balance already exceeds the limit, a lower loan amount or a non-FHA product is the route.
Do county limits change every year?
Yes. HUD resets them annually, and the year that applies depends on the date your FHA case number is assigned. A home near the line is worth rechecking when new limits take effect.
Can I take out all of my equity?
No. The 80% cap means at least 20% equity stays in the home. On higher-priced homes the county limit can leave even more equity untouched.
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.
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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References
1. HUD Mortgagee Letter 2025-23, FHA mortgage limits
2. HUD FHA Mortgage Limits lookup
3. CFPB: What are the FHA loan limits for my county?
4. HUD Mortgagee Letter 2019-11
5. HUD announcement on the FHA cash-out cap
6. CFPB’s research blog on cash-out refinances
7. CFPB Office of Research cash-out refinance paydown paper
This article is part of Lendmire’s FHA Loan series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: FHA Cash-Out Refinance Requirements at a Glance · How to Choose a VA Cash-Out Lender From a Conventional or FHA Loan · VA Cash-Out Lender Questions for a Conventional or FHA Refinance
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.