The Quick Read: The most an FHA cash-out can support on an unapproved condo is 80% of the appraised value, counting every lien on the unit, and only if the building clears FHA’s single-unit review. If the building does not clear review, FHA cannot insure the loan, so the supportable amount under FHA is zero, however much equity you have. Two separate gates decide the number: the loan gate and the building gate. Everything below walks through both.
What Are the Two Gates Behind the Cash-Out Number?
The cash-out amount comes from two tests that work independently. The loan gate sets a ceiling as a percentage of value. The building gate decides whether FHA will insure a loan on your unit at all. Pass one and fail the other, and you have no FHA cash-out.
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 loan gate is about you and the loan. Across the wholesale programs we place FHA files with, the cash-out refinance reaches 80% loan-to-value (LTV, the loan balance divided by the home’s appraised value) on a home you have owned and lived in for 12 months before the case number is assigned.
The building gate is about the condo project. We will get to what that means shortly.
Most homeowners think about equity first and the building second. In practice, it is the other way around. A great equity position does nothing if the building cannot pass.
How Is the 80% Cap Actually Calculated?
The maximum new loan is 80% of the appraised value, and that limit counts every lien on the property, not just the first mortgage. HUD cut the cap from 85% to 80% in Mortgagee Letter 2019-11. The appraisal sets the value that the percentage is applied to.
Here is the math in words, with no dollar figures:
1. Start with the appraised value of the unit.
2. Take 80% of it. That is the ceiling on the total new loan.
3. Subtract what must be paid off: your existing first mortgage and any other lien that has to be cleared.
4. Subtract closing costs.
5. Subtract the upfront mortgage insurance premium if it is financed into the loan. On FHA loans that premium is 1.75% of the base loan.
6. What remains is the cash that reaches you.
Two more points shape the result. County loan limits apply, so the total cannot exceed the limit for your county. And a second lien matters. If you have a home equity line of credit, plan on the lender counting its full credit limit, not only what you have drawn. HUD’s own guidance on this point is worth confirming with your loan officer for your specific lien.
The FHA premium also continues after closing. 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 the full term. At or below 90% it ends after eleven years. That is a program mechanic, not a price quote, and it affects what a cash-out costs you over time. Every parameter remains subject to lender guidelines and a full review of property, leverage, and credit.
What Does “FHA-Approved Condo” Actually Mean?
An FHA-approved condo is a unit in a project that HUD has reviewed and placed on its approved list. HUD says FHA insures condo loans to purchase or refinance a unit when it is in an approved project, or in a non-approved project that meets Single-Unit Approval requirements.
The HUD list is the record. A listing that says “FHA approved” is not proof. Approvals lapse, and HUD generally describes approval as lasting three years. A building approved when you bought may have expired by the time you refinance.
Search HUD’s FHA condo list for your project’s status. You will see labels such as approved, rejected or expired. Each one points you down a different road:
| Status | What it usually means for you |
|---|---|
| Approved | The building gate is open; the loan gate decides the rest |
| Expired | Recertification or SUA is needed before a new FHA loan |
| Rejected | FHA has turned the project down; SUA is unlikely to fix it |
| Not listed | Never applied; SUA may be the route |
Existing FHA loans on a lapsed building are not affected. The problem shows up when you want a new loan.
What Is Single-Unit Approval, and Does It Cover Cash-Out?
Single-Unit Approval is FHA permission to insure a loan on one unit in a condo project that is not on the approved list. It approves the unit, not the building. The next owner in the same project does not inherit it.
HUD’s condominium page sets the basic entry conditions. The project must be complete and ready for occupancy. It must have at least five dwelling units. The unit cannot be a manufactured home. The project also has to meet a subset of FHA’s full approval tests. HUD names FHA insurance concentration, owner-occupancy percentage and the project’s financial condition.
The Federal Register final rule created the framework and let HUD set SUA’s specific standards by notice. That is why the details move. HUD has updated its handbook since the rule, so the exact concentration breakpoints are best taken from your lender. Think of the concentration test this way: it is a cap tied to project size on how many units in the building can carry FHA loans.
One caution from the practitioner side. Whether SUA applies to a cash-out in the handbook’s current text is something your lender must confirm against the live guideline before you spend money on an appraisal. Do not assume it from a blog post, including this one.
How Does the SUA Process Work, Step by Step?
Your lender requests SUA, not you and not the HOA. The lender asks for a case number in FHA’s system with the single-unit option selected, sends documentation to FHA, and certifies that the unit and project meet FHA’s standards. That case number is not an approval of the project. It starts the review of one unit.
Here is the sequence a typical file follows:
1. Check status. Confirm the building is not on the approved list, or that its approval has lapsed.
2. Confirm your own eligibility. Owner-occupied principal residence, with the 12-month ownership and occupancy history behind you.
3. Request SUA through your lender. The lender carries the compliance responsibility. HUD has stressed that lenders must verify SUA compliance themselves.
4. Collect HOA documents. The lender needs the project questionnaire, the association budget and financials, proof of insurance, owner-occupancy and delinquency data, and litigation disclosure.
5. Order the appraisal. It sets the value for the 80% test.
6. Underwrite the borrower. Credit, income and payment history get the usual full review.
7. Resolve the unit’s status. The cash-out cannot close until the building question is settled.
Build extra time into your plans. We do not quote timelines here, because they vary with how responsive the association is.
Where Does the Building Gate Break the General Rule?
The 80% rule holds only if the building survives review. These are the common ways it does not.
Owner-occupancy too low. FHA wants a healthy share of the units owner-occupied. Your lender can give you the current threshold for Single-Unit Approval (SUA) from the live guideline, which is safer than relying on a number you found online.
Too many FHA loans already. If the project already has its allotment of FHA-insured units, your unit may be turned away even though your file is strong.
Weak association finances. Heavy delinquencies, thin reserves or a poor budget can sink a project. Pending litigation and physical condition problems count too.
Insurance gaps. Coverage must meet FHA’s standards. Condos in flood-hazard areas draw added attention, so ask your lender how the current handbook treats projects in those zones.
Incomplete or small projects. SUA does not reach projects under five units, incomplete projects, or unapproved phases of an approved project.
Which of these can be fixed? An HOA that updates its insurance or submits missing documents may rescue a file. A concentration or owner-occupancy shortfall depends on the makeup of the building, which neither you nor the lender controls, so it is hard to change in the short run. Those two are the ones to check first, before you spend money on an appraisal.
Do Streamlines and Site Condos Change the Picture?
Yes, in two narrow ways. A streamline refinance is a no-cash-out loan on an existing FHA mortgage, so it cannot give you cash back. Across the programs we place, the FHA Streamline needs no appraisal and only a limited credit review, but it requires a net tangible benefit. Whether it skips condo approval depends on current handbook text, so confirm before you count on it. Either way, it does not answer the cash-out question.
Site condominiums are the second exception. A qualifying site condo, where you effectively own the structure and the land, can be treated like a detached home and may not need project approval or SUA. The recorded legal documents decide, not the marketing label. Plenty of townhomes are not site condos.
One more edge: standard FHA cash-out is for owner-occupied primary residences only. If your condo is a second home or a rental, it does not qualify for this program. Occupancy decides the leverage, and for FHA cash-out the occupancy answer is simply primary residence.
What Does a Worked Example Look Like?
Run the logic on two hypothetical condo owners, both with a primary residence they have lived in for more than 12 months and both seeking the maximum 80% LTV. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
| Step | Owner A: building passes SUA | Owner B: building fails SUA |
|---|---|---|
| Building gate | Cleared | Not cleared |
| FHA cash-out | Possible after payoffs and costs | Zero under FHA |
| Next move | Full underwriting | Consider other products |
Both owners have the same equity and the same ceiling. Only the building gate differs. Owner A then subtracts the payoff, closing costs and financed premium from the ceiling. Owner B’s equity is still real, but FHA cannot reach it.
Notice what is not in the table. An 80% LTV does not guarantee an approval or a specific cash amount. Credit, income, payment history and seasoning still apply, subject to lender guidelines and full file review. The FHA program also looks at debt ratios, starting at a base pair of 31/43 (housing costs and total debts as a share of income) and reaching 40/50 with documented compensating factors at the top tier.
What If the Building Cannot Qualify?
Your options shift to other products. A conventional cash-out refinance uses a different condo project review. That is a separate gate with separate rules, so a building that fails FHA may or may not pass it. A home equity loan or a home equity line of credit (HELOC) borrows against the equity without replacing your first mortgage. Each has its own costs and risks.
Keep this tradeoff in view. A cash-out refinance replaces your mortgage with a bigger one and hands you the difference. The Consumer Financial Protection Bureau notes that you often pay closing costs, and its home equity guide says a larger loan can raise your monthly payment and lengthen your payoff time.
If your current loan is FHA and you only want a lower term or better structure, the no-cash-out routes are worth a look. If you need the cash, compare the full cost of each product on the Loan Estimate, not just the headline equity number.
Key Terms Defined
Loan-to-value (LTV): The loan balance divided by the home’s appraised value, shown as a percentage.
Cash-out refinance: A new, larger mortgage that pays off the old one and gives you the difference in cash.
Single-Unit Approval (SUA): FHA’s approval of one unit in a condo project that is not on the approved list.
Approved condominium project: A project HUD has reviewed and listed as eligible for FHA loans.
Seasoning: The required time you must have owned and lived in the home before the refinance case number is assigned.
Mortgage insurance premium: The FHA charge paid upfront and annually that protects the lender if the loan defaults.
Frequently Asked Questions
Can I get an FHA cash-out on a condo that is not on HUD’s approved list?
Possibly, if the unit passes Single-Unit Approval. The building must be complete, have at least five units, not be a manufactured home, and meet a subset of FHA’s tests. Your lender must confirm current handbook text for cash-out transactions before you proceed. Qualification is subject to lender guidelines and full file review.
Who requests Single-Unit Approval: me, the HOA or the lender?
The lender does. You and the HOA supply information, but the lender submits the request and certifies that the unit and project meet FHA’s standards. Approval is unit-specific, so each unit needs its own review.
Does an old FHA approval on my building still count?
Not necessarily. Approvals generally last about three years and then lapse. A loan you already have is not affected, but a new FHA loan needs recertification or SUA. Check HUD’s list for the current status.
How much equity can I actually take out?
The cap is 80% of appraised value across all liens. From that ceiling, subtract your payoff, closing costs and any financed upfront premium. County loan limits also apply. What remains is the most you could receive, though credit and income can lower it.
Can I use this on a second home or a rental condo?
No. Standard FHA cash-out is for an owner-occupied primary residence you have owned and lived in for 12 months. Occupancy decides the leverage, and these properties fall outside the program.
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. 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 brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. 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
3. Federal Register, Project Approval for Single-Family Condominiums
4. CFPB, Similar-to-HELOC explainer
5. CFPB, Using Home Equity guide
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 Cash Reserves an FHA Cash-Out Requires on a Duplex · How Much a Couple on One Mortgage Gets From FHA Cash-Out or VA Cash-Out · How Much Cash Comes Out of an FHA Cash-Out Refinance to Go Fixed?
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.