The Quick Read: Usually no more than you would get on your own. A co-borrower who lives elsewhere does not raise your cash-out amount, and their income generally cannot be used to qualify you. The cap is 80% of the home’s appraised value, and your cash is whatever is left after the old loan, closing costs and the financed premium. If you cannot qualify alone as the person living in the home, the co-borrower usually cannot fix that.
How the Cash Amount Actually Gets Set
The cash you receive comes from leverage, not from who signs the note. The FHA cash-out refinance reaches 80% loan-to-value (LTV, the new loan as a percentage of the home’s appraised value). The home must have been owned and occupied by you as your primary residence for 12 months before the case number is assigned. Subject to lender guidelines and full file review, 80% LTV is the ceiling.
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.
Here is the order of operations:
1. The appraiser sets the value.
2. The lender takes 80% of that value as the largest base loan.
3. The payoff of your existing mortgage comes out of that amount.
4. Closing costs and anything else paid from proceeds come out next.
5. What remains is yours.
A co-borrower does not appear anywhere in that list. They are not a multiplier, and they are not a second source of equity. The equity belongs to the house.
One more piece sits on top: the FHA upfront mortgage insurance premium, which is financed. That means it is added to what you owe rather than paid in cash at the table. The annual premium then varies depending on term, loan amount and LTV, so confirm the exact cost and how long it lasts with a qualified FHA lender or loan officer. County loan limits apply too, and they change every year, so check yours with a loan officer. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
A Plain Example in Percentages
Say a home appraises at 100% of its value. The most the base loan can be is 80%. Your current mortgage balance is 60%. That leaves up to 20% of the home’s value before costs and the premium.
Now subtract closing costs and think about the premium’s effect on the new balance. The cash in your hand is smaller than 20%. A low appraisal shrinks it further, and it does so dollar for dollar. If the home appraises 5% lower than you hoped, the 80% cap moves with it, and the cash comes straight out of your share.
Run it for each household setup:
| Situation | Whose income counts | Effect on cash |
|---|---|---|
| Occupant alone on the note | Occupant only | Same 80% cap |
| Non-occupant also on the note | Occupant only | Same cap, more liability |
| Non-occupant removed | Occupant only | Same cap, if you qualify alone |
The cash row is the same in every case. What changes is who is responsible for the debt and whether the file clears underwriting at all.
Why a Co-Borrower Who Lives Elsewhere Adds No Qualifying Help
This is the part that surprises people. On an FHA purchase, a non-occupant co-borrower is allowed. A parent can sign with a first-time buyer, and the parent’s income can help. Cash-out is stricter.
HUD’s Handbook 4000.1 says income from a non-occupant co-borrower may not be used to qualify for a cash-out refinance. The reasoning is straightforward. A cash-out turns home equity into spendable money. The agency wants the person living in the home, the one who carries the daily risk of losing it, to be able to afford the larger loan on their own.
Individual lenders may draw a harder line than HUD does. Some will not allow a non-occupant co-borrower on a cash-out at all. That is a lender choice layered on top of HUD’s rules, and it varies from file to file.
Whether any extra leverage limit applies when a non-occupant is on the note is a point to settle with a loan officer on your specific file. Do not assume a lower cap or a higher one, and ask the question directly.
Who Has to Live There, and For How Long?
FHA cash-out is for a principal residence only. The test is met by the person who lives in the home, and a co-borrower living somewhere else cannot meet it for you.
Lenders look at four things before cash comes out:
- Ownership and occupancy. You owned and lived in the home as your primary residence for the 12 months before the case number.
- Payment history. The loan being refinanced has been paid on time through the lookback period. Missed or late payments can stop the file.
- Appraisal. The value must support the loan you want.
- Your own qualifying. Your income and credit have to clear the ratios on their own.
On ratios, the base pair is 31/43 (housing payment and total debts as percentages of income) with no compensating factors. Documented compensating factors can stretch that to 40/50 at the top tier. Across the FHA files Lendmire arranges, the wholesale programs generally start at a 580 decision score. HUD itself allows lower scores in some cases, but the network does not reach below 580.
Two special cases come up. If you inherited the property and never treated it as an investment, you generally don’t need a minimum occupancy period before a cash-out. If you rented it out after inheriting, expect to occupy it for 12 months first. Confirm the details against the handbook with your loan officer, since lenders apply them differently.
An FHA Streamline refinance is not a cash path. It refinances an existing FHA loan without an appraisal, with a limited credit review and a net tangible benefit, and it does not put cash in your hand.
What Their Credit and Debts Still Do to the File
Their income is excluded, but they are still on the note. That has consequences.
A co-borrower’s credit record and debts may still be reviewed, and the underwriter decides how they affect the file. Treat this as a question to ask early rather than a guess to make. A co-borrower with heavy debts or a thin credit file can complicate an application even when their income is not counted.
The bigger issue is liability. The CFPB says a co-signer or co-borrower takes full responsibility to pay back the loan with you. That includes missed payments and even the full loan amount. So a co-borrower who adds no qualifying help still carries full responsibility on a bigger balance. The cash-out raises that balance for everyone on the note.
Put that to the co-borrower in plain words before anyone signs. It is a bigger debt, not a favor with a small footprint.
When the Occupant Can’t Qualify Alone
Walk through it as a short decision path:
1. Can you qualify on your own income and credit? If yes, the cash-out proceeds on the 80% cap, with or without a co-borrower on the note.
2. If not, is the shortfall small? Paying down other debts first can sometimes improve your ratios. A loan officer can tell you whether that is enough.
3. If the gap is large, does a different loan fit better? Conventional cash-out follows its own co-borrower rules, and a jumbo loan has different ones again.
4. If none fits, waiting may be the answer. Time in the home, a cleaner payment record or lower debts can all change the picture.
Conventional and VA cash-out have their own co-borrower rules. This article does not assume they match FHA’s, so check them on their own terms.
Common Misconceptions
“A parent who co-signs can help me qualify for more cash.” Their income is excluded on FHA cash-out, and they still take on full liability.
“FHA cash-out goes to 85%.” That is an older, higher limit. HUD’s Mortgagee Letter 2019-11 set the cash-out maximum at 80% of adjusted value. HUD’s announcement of the change explains the reasoning and the earlier cut that came before it.
“A co-signer carries a lighter obligation.” The CFPB treats a co-signer and a co-borrower alike, with full responsibility.
“I can take my co-borrower off later.” Removing a borrower generally means a new loan, and the remaining borrower has to qualify alone. Confirm the specifics with a loan officer.
“If the cap is 80%, I’m guaranteed that much cash.” No. The cap is a ceiling. Approval, appraisal, payoff and costs decide what you actually receive.
What the Cash Does to Your Budget
A cash-out replaces your whole first mortgage with a bigger one. The payment, the mortgage insurance and the interest all reset on the entire balance, not just the new cash. That is the mechanics of any cash-out, and it applies to you whether a co-borrower is on the note or not.
How you use the cash matters too. The CFPB reports that paying non-mortgage debts with mortgage debt can increase the risk of foreclosure. Its survey also found that paying off other bills or debts was a common reason borrowers took cash out. If that is your plan, weigh the trade carefully. You are turning unsecured debt into debt secured by your home.
There is also a short federal cancellation window after closing on a primary residence refinance. Your loan officer can walk you through how it works on your file.
Questions to Ask Before You Apply
- Does your lender allow a non-occupant co-borrower on a cash-out at all?
- If so, how is that person’s credit and debt treated?
- Whose name has to be on title, and whose on the note?
- Can the occupant qualify alone at the full amount you want?
- What does the appraisal need to show for the cash to make sense?
- What will closing costs and the financed premium do to your net?
Bring proof of occupancy, a payment history on the current loan, and a list of the debts you want to pay off. That list alone often shows whether the plan holds together.
Key Terms Defined
Non-occupant co-borrower: a person on the loan who does not live in the home.
Cash-out refinance: a new, larger mortgage that pays off the old one and hands you the difference in cash.
Adjusted value: the appraised value the lender applies the 80% cap to.
Net proceeds: the cash you actually receive after the payoff, closing costs and other items paid from the loan.
Upfront premium: the FHA mortgage insurance charge of 1.75% of the base loan, added to the balance.
Frequently Asked Questions
Can my co-borrower’s income help me qualify for an FHA cash-out refinance?
Generally no. HUD’s handbook says income from a non-occupant co-borrower may not be used to qualify. You need to qualify on your own income and credit as the person living in the home. Some lenders go further and will not allow a non-occupant on the note at all, so ask before you apply.
Does adding a co-borrower change how much cash I can take out?
No. The cap is 80% of the appraised value, and the cash is that amount less your payoff, closing costs and the financed premium. A co-borrower affects who is responsible for the loan, not the size of the check. Subject to lender guidelines and full file review.
Does the co-borrower have to live in the home?
The occupant has to. The person who lives there must have owned and occupied the home as a primary residence for 12 months. A co-borrower living elsewhere cannot meet that test on your behalf.
What happens to the co-borrower’s liability after the cash-out?
It grows with the balance. They carry that on the new, larger loan.
Can an FHA Streamline give me cash instead?
No. A Streamline refinances an existing FHA loan with no appraisal and a limited credit review. It is built to lower your cost or improve your terms, not to pay out equity.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging FHA, VA, conventional and jumbo purchase and refinance loans through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
3. HUD Mortgagee Letter 2019-11
4. HUD press release on the cash-out LTV change
5. 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 to Plan and Use an FHA Cash-Out Refinance to Go Fixed · How to Qualify and Apply for an FHA Cash-Out Refinance After 12 Months · How Lenders Underwrite an FHA Cash-Out Refinance Versus Limited Cash-Out Refinance
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.