The Quick Read: Your new FHA cash-out loan cannot exceed the county loan limit, no matter how much equity you have. Two ceilings apply to every file: a dollar limit set by county and unit count, and an 80% loan-to-value cap. The lower one controls. Owning an existing FHA loan does not change either test, because the new loan replaces the old one and is measured on its own.
Key Takeaways
- The county limit is a dollar ceiling on the new first mortgage. It changes every year and depends on where the home is and how many units it has.
- The value cap is 80% of the home’s appraised value, counting the new loan plus any other liens that stay.
- On most homes the 80% test decides the outcome. The county limit takes over on higher-priced homes.
- A cash-out is not a Streamline. A Streamline refinances your FHA loan without meaningful cash back.
- Your old loan’s size or origination date does not carry over. The new loan is underwritten fresh, with a new upfront premium.
What Is the County Limit on an FHA Cash-Out?
The county limit is the largest first mortgage FHA will insure on a home in your county. FHA sets it by county and metro area, and it moves with the unit count. A one-unit home has the lowest ceiling. A four-unit home has the highest.
Most borrowers think of this as a purchase rule. It is not. FHA limits apply to forward mortgages, and a cash-out refinance is a forward mortgage. So the dollar ceiling caps your new loan the same way it would cap a buyer’s.
Limits fall into three broad tiers. Lower-cost counties sit at a national floor. Higher-cost counties get a higher figure tied to local home prices, up to a national ceiling. A few places, including Alaska, Hawaii, Guam and the U.S. Virgin Islands, have special exception limits that run higher still. This article never quotes a county dollar figure, because the number changes every year and your county’s figure is the only one that matters. HUD’s FHA mortgage limits lookup lets you search by state, county or metro area. Set the limit type to FHA forward, pick the right year, and enter the unit count.
Which year’s limit applies? The one in effect when your FHA case number is assigned. Plan a refinance near a year-end change and that detail matters.
On the wholesale programs Lendmire places FHA loans with, a cash-out on a principal residence reaches 80% LTV once you have owned and lived in the home for 12 months before the case number. The FHA cash-out refinance program runs through that same envelope, and every figure here is subject to lender guidelines and full file review.
How Is an FHA Cash-Out Underwritten, Step by Step?
A cash-out file moves through the same sequence every time. Each step is a place it can stop.
1. Pull the county limit. Use the lookup tool with the right unit count and limit year. Write the number down.
2. Order an FHA appraisal. Cash-out is a full-appraisal transaction. The appraised value feeds what FHA calls the Adjusted Value, and the 80% test uses that number, not your purchase price and not an online estimate.
3. Run the value test. Adjusted Value times 80% is the ceiling for the new first mortgage plus any liens that stay in place.
4. Run the county test. The new first mortgage, with any subordinate liens, has to stay within the county limit.
5. Take the lower result. That is your maximum.
6. Subtract what the new loan must cover. The payoff of your existing FHA loan comes first. Then closing costs, the financed upfront premium and any debts being paid off at closing. Whatever remains is your cash.
7. Underwrite you. The lender reviews credit, income, payment history, occupancy history and the new payment. Ratios start at 31/43 (housing and total debt to income) and can reach 40/50 with documented compensating factors at the top credit tier. On the programs Lendmire works with, the minimum decision score is 580. The automated finding governs most files.
The full rule set sits in HUD Handbook 4000.1. Read the live Handbook, because it is updated periodically.
Which Ceiling Wins: The Dollar Limit or the 80% Cap?
The lower of the two wins. Here is how they compare side by side.
| Factor | County limit | Value cap |
|---|---|---|
| What it measures | Dollar size of the new loan | New debt as a share of value |
| Set by | FHA, by county and unit count | FHA, one national figure |
| Changes | Every year | Only when FHA changes policy |
| Bites hardest on | Higher-priced homes | Most homes |
The 80% figure comes from HUD Mortgagee Letter 2019-11, which cut maximum LTV and CLTV on FHA cash-out refinances to 80% of Adjusted Value. FHA allowed more before that change, so older web pages quoting higher numbers are out of date. CLTV (combined loan-to-value) matters here because it counts every lien, not only the first mortgage.
Here is a simple way to see where the county limit starts to bind. Divide the county limit by 0.80. The result is the home value above which the dollar limit, not the value cap, sets your maximum. That is arithmetic, not a published FHA figure. Below that value, the 80% test usually decides. Above it, the county ceiling does.
What Do the Worked Examples Look Like?
These cases use percentages of value, not dollar amounts. They are modeled assumptions, not quotes.
Case one: the value cap binds. Picture a single-family home in a mid-priced county. Your FHA balance is 60% of the appraised value. The 80% cap leaves 20 points of value. Closing costs and the financed upfront premium come out of that room first. Your cash is what is left. The county limit sits well above 80% of the value, so it never comes into play.
Case two: the county limit binds. Say you own a higher-priced home in a county where the limit equals only 70% of the appraised value. The 80% cap would allow more, but the dollar ceiling stops you at 70%. If your existing balance is already 62% of value, the room left for costs and cash is about 8 points, not 18. Same equity, much smaller check. Not what most borrowers expect.
Case three: a duplex. A two-unit home in the same county carries a higher dollar limit than a one-unit home. It works if you live in one unit, since cash-out is limited to owner-occupied principal residences, one to four units. The county limit may sit comfortably above 80% of the value here, so the value cap decides again. Unit count can flip which ceiling controls.
None of these cases lets you pull out 100% of your equity. No cash-out product does. That is the point of the cap.
What Changes When You Already Have an FHA Loan?
Less than you would think. An existing FHA loan gives you no special treatment on the cash-out, and the new loan carries none of the old loan’s history.
- The new loan replaces the old one. A cash-out refinance takes the place of your first mortgage. Your current balance gets paid off, and the old terms go away. If you have a favorable existing loan you would rather keep, a home equity loan or HELOC leaves it in place. That is a different product with different tradeoffs.
- Premiums start over. The new loan carries an upfront premium of 1.75% of the base loan, usually financed. It applies to the whole new loan, not just the cash you take out. A prior FHA loan does not exempt you. Federal exceptions are narrow and apply mainly to Streamline and Simple refinances of loans endorsed before mid-2009 and to Hawaiian Home Lands loans. 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, the annual premium lasts the full term. At or below 90%, it ends after eleven years. The HUD premium schedule in Mortgagee Letter 2023-05 lays this out in a table. Lendmire’s piece How Much the Upfront Premium Cuts an FHA Cash-Out at the County Limit walks through the effect in detail.
- The size of your old loan does not matter, except in one case. If your balance already sits at or near the county limit, a new loan large enough to cover the payoff plus costs may not fit. More on that below.
- Seasoning clocks run separately. Ownership, occupancy and payment history are each tested. The usual test is owning and living in the home as your principal residence for the 12 months before the case number. Payment history is reviewed on its own. Check the current wording in the Handbook, since each clock has details.
If what you want is a lower payment or a better term on the loan you have, not cash, the Streamline is the tool for that. It needs no appraisal, only a limited credit review and a net tangible benefit, and the premium continues. Any cash back on a Streamline is small and incidental. Do not confuse the 80% cash-out rule with Streamline rules. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Where Does the General Rule Break?
Several edge cases bend the picture. Most borrowers never meet them, but they are worth knowing.
- Hawaiian Home Lands (Section 247). The cut to an 80% cap does not apply to loans insured under that section. These are rare and specific.
- Special exception areas. Alaska, Hawaii, Guam and the U.S. Virgin Islands have higher limits than the mainland. Use the lookup tool, not a number from memory.
- Subordinate liens and HELOCs. A second lien that stays in place counts toward both the county limit and the 80% CLTV. A large HELOC can eat the room your cash-out needs. Some borrowers pay it off with the new loan. Others find the math does not work.
- Inherited homes. The occupancy period may be waived for certain inherited properties. The conditions are specific, so confirm them in the Handbook before you plan around them.
- A recent existing loan. If you bought or refinanced recently, ownership, occupancy and payment-history tests may not be met yet. Waiting is sometimes the only fix.
- A balance at or above the limit. If your current balance already reaches the county limit, a new FHA cash-out does not fit. The new loan has to cover the payoff, and the limit caps it. Anything above the limit has to come from somewhere else.
Credit events have their own clocks. HUD’s waiting periods are two years from a Chapter 7 discharge and three years from a foreclosure. Those are HUD rules, not a promise from any lender.
What Counts Inside the Ceiling?
The question to ask your loan officer is which number each test uses. The county limit is tested against the new first mortgage and any subordinate liens that stay. The financed upfront premium is added to the base loan. Whether a given test looks at the base loan or the total with the premium changes your room, so ask for the worksheet and read it.
Cash to you is whatever is left after the payoff, closing costs, the financed premium and any debts paid at closing. Your own file decides that number. Nothing here can tell you what yours will be.
What If the County Limit Blocks Your Cash-Out?
You have options. None is automatic, and each has a tradeoff.
| Option | What it does | Main tradeoff |
|---|---|---|
| FHA Streamline | Refinances the FHA loan, little cash back | Premium continues; no real cash |
| FHA rate-and-term | Refinances to 97.75% on a principal residence occupied for 12 months | Needs appraisal; no cash-out |
| Conventional or jumbo cash-out | Larger loan sizes available | Different credit and ratio rules |
| HELOC or home equity loan | Keeps your first mortgage in place | Second lien; payment can rise |
| Wait and re-run | Limits change yearly; value may grow | Uncertain; no guarantee |
Treat this as a menu to compare, not a ranking. Which fits depends on your balance, your equity, your credit and what you need the money for.
How Should You Decide in Practice?
Start with the question of whether you need cash at all. A cash-out refinance replaces your first mortgage. Because the new loan replaces the old one, the terms change, and the monthly payment may rise since the new loan is larger. It may also stretch the time it takes to pay the mortgage off.
Next, think about what the cash is for. The CFPB’s research on cash-out refinance borrowers found that more than half of cash-out borrowers cited paying off other bills or debts each year from 2014 to 2019, with home repairs or new construction second. The same report notes that paying non-mortgage debt with mortgage debt can raise the risk of foreclosure. That is worth weighing before you roll credit cards into a loan secured by your home.
Then run the sequence in order. Pull the county limit for your unit count. Get a realistic value. Test 80%. Test the county ceiling. Subtract the payoff and costs. If the leftover is not enough to justify the new premium schedule, a Streamline or a second lien may serve you better. Get a Loan Estimate and compare the full terms before you commit.
Key Terms Defined
County loan limit: the largest first mortgage FHA will insure on a home in a given county, set by county and unit count and updated each year.
Adjusted Value: the appraised value figure FHA uses for the loan-to-value test, not your purchase price or a lender’s estimate.
CLTV (combined loan-to-value): your new first mortgage plus any other liens that stay, divided by the home’s value.
Cash-out refinance: a new first mortgage larger than your payoff, with the difference paid to you.
Streamline refinance: an FHA-to-FHA refinance with no appraisal, a limited credit review and a net tangible benefit, not designed to produce cash.
Upfront mortgage insurance premium: a one-time charge of 1.75% of the base loan, usually financed into the new loan.
Case number: the FHA identifier assigned to your file. Its date decides which year’s county limit applies.
Where to Go From Here
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. Lendmire is a mortgage broker, not a lender. It arranges FHA loans through wholesale lenders, and every program figure is subject to lender guidelines and full file review. Nothing here is a commitment to lend. Reach the team at 828-256-2183 or request a quote through the site.
Frequently Asked Questions
Can I get an FHA cash-out for more than the county limit if I have lots of equity?
No. The dollar limit caps the new loan regardless of how much equity you hold. Equity only helps up to the lower of the two ceilings. Past that, the extra has to come from another product.
Does my existing FHA loan count against the county limit?
Your current balance matters only because the new loan has to pay it off. The old loan’s own size and age do not carry over. If the balance plus costs does not fit under the limit, a new FHA cash-out does not fit either.
Why is my approved cash lower than 80% of my home’s value?
Because 80% is a cap on total debt, not a cash amount. The new loan must first cover your payoff, closing costs and the financed upfront premium. Any liens that stay also count. Income, credit and debt ratios can lower your approval too.
Where do I find my county’s FHA limit?
Use HUD’s FHA mortgage limits lookup. Pick the FHA forward program, the right year and the unit count for your home. The limit year is tied to when your case number is assigned.
Can a Streamline give me cash instead?
Not in a meaningful amount. A Streamline is a no-cash-out type that only allows a small incidental amount back. If you want real cash from a home you live in, the FHA cash-out is the program built for it, with an appraisal and the 80% cap.
For your own numbers, request a scenario review with Lendmire.
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 FHA Mortgage Limits Lookup
2. HUD Mortgagee Letter 2019-11
3. HUD Mortgagee Letter 2023-05
4. CFPB’s research on cash-out refinance borrowers
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: How Much the Upfront MIP Cuts an FHA Cash-Out on Your Existing FHA Loan · FHA Cash-Out Refinance Documentation for a Locked-in Homeowner · Can an FHA Cash-Out Refinance Exceed the County Loan Limit?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.