How to Time an FHA Cash-Out so Ownership Meets the Case Number Date

The Quick Read: Ownership and occupancy are counted backward from the day the FHA case number is assigned, not from your application or your closing. Across the wholesale programs Lendmire works with, the FHA cash-out reaches 80% LTV on a home you owned and lived in as your principal residence for the 12 months before that date. If the case number is requested a few days before that 12-month mark is complete, the file fails the test for this product until the full 12 months have passed. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.

The Rule in Plain Words

At least one borrower on the new loan must have owned the home and lived in it as a principal residence for the full 12 months before the case number date. One borrower is enough. A spouse who moved in last month does not hurt a co-borrower who has the full year.

The 80% ceiling is measured against the home’s appraised, adjusted value. HUD cut the cash-out limit from 85% to 80% for case numbers assigned on or after September 1, 2019, according to HUD’s announcement. HUD said the change reduced risk to the FHA insurance fund and lined FHA up with the conventional cash-out maximum.

Older rules tied leverage to how long you had owned the home, and that logic still shows in today’s structure. HUD Mortgagee Letter 2009-08 treated 12 months or more as the full-leverage tier. That letter is history. Current policy anchors on the case number date, so don’t plan around the old language.

This article is about the calendar.

Key Terms Defined

Case number: The identifier FHA assigns to your loan file. Your lender requests it, and its date starts the clock check.

Seasoning: The length of time you have owned and occupied the home before the case number date.

Principal residence: The home where you actually live most of the year. A second home or rental does not count.

Qualifying borrower: The borrower who carries the 12-month ownership and occupancy history on the file.

Adjusted value: The appraised value as FHA uses it to apply the 80% cap.

Why the Case Number Date Is the Anchor

It is easy to assume the 12-month window runs to the closing date, or to the day you apply. It does not. The case number is assigned early in the file, so the 12 months must already be complete when the lender orders it, regardless of how long the rest of the file takes, which varies by file and lender.

Picture the sequence this way:

1. You buy the home and move in.

2. Twelve full months pass.

3. Your lender requests the case number.

4. The appraisal is ordered and completed.

5. Underwriting reviews the file.

6. You sign, and after the rescission period the old loan is paid off and the cash is released.

The test happens at step three. Steps four through six can fall well after your anniversary without hurting you. Steps one through three cannot be rushed.

How to Calculate Your Earliest Eligible Date

Count 12 full months from the later of two events: the day you took title, or the day you began living in the home as your principal residence. The first possible case number date is the day after that 12-month mark is complete. Waiting a few extra days beyond it is a sensible cushion.

Three scenarios show how it plays out.

On time. A borrower closed on the purchase and moved in the same week. Fourteen months later, the lender requests the case number. Ownership and occupancy both exceed 12 months. The timing is clean, and the open questions become value, credit and the payment record.

A few days short. A borrower took title 12 months ago but moved in two weeks after closing. The occupancy clock started at move-in, so the 12 months of occupancy is not yet complete when the lender wants to start. Requesting the number early means the file fails the test. The borrower may also spend on an appraisal or application fees before learning that. Waiting those two weeks protects that money.

A change in occupancy. A borrower lived in the home for eight months, rented it for six, then moved back in. The rental stretch interrupted occupancy as a principal residence, so the 12 months is counted from the day the borrower moved back in. The case number cannot be requested until a full 12 months have passed from that day. A borrower in this situation should talk to a loan officer before paying for anything.

One caution. Documentation, not memory, decides the date. Use the deed or title record for ownership and your move-in evidence for occupancy.

Proving Ownership and Occupancy

Lenders generally ask for proof of both. Ownership is shown by the deed or title record. Occupancy is typically shown by utility bills, employment records, and identification tied to the property address, covering the full 12 months.

Build the file before you apply:

• Copy of the recorded deed.
• Twelve months of utility bills in your name at the address.
• Pay stubs or employer records showing the address.
• Driver’s license and voter or vehicle registration at the address.
• A written note explaining any gap, such as military deployment or a temporary move.

The more consistent your documents, the fewer questions at underwriting.

Three Tests, Not One

Ownership, occupancy and payment history are separate checks. Meeting one does not satisfy the others.

The payment history review generally looks at the prior 12 months, or the life of the loan if shorter. Payments are expected to have been made within the month due. A borrower with a perfect calendar but a late payment history may still face a problem.

Then comes the normal underwriting. Across the wholesale programs Lendmire places with, the base ratio pair is 31/43 for housing and total debt, and documented compensating factors can stretch toward 40/50 at the top tier. Credit decisions start at a 580 decision score for maximum financing. FHA mortgage insurance applies, with an upfront premium of 1.75% of the base loan, and an annual premium that depends on term, amount and LTV. County loan limits also apply, and they change every year. All of this is subject to lender guidelines and full file review.

Where the General Rule Bends

Inherited property. Someone who inherits a home may not need to satisfy a minimum occupancy period, provided the home has not been treated as an investment property since inheritance. If the heir rents it out first, the heir would need to occupy it as a principal residence for 12 months before a cash-out. A gift is not treated like an inheritance. Confirm details with your loan officer, since handling depends on the file.

Adding a borrower or changing title. A newly added borrower does not reset the clock for someone who already has 12 months, as long as that borrower with the full year stays on the new loan. But a quitclaim deed to a family member who has not lived there for a year can create trouble, because FHA looks at who owned and occupied, not just when a deed was recorded. A co-borrower who does not live in the home generally cannot contribute income to qualify on a cash-out.

Divorce, separation or death. One borrower can come off the old loan and title in these situations, and separate payment-history rules apply. These files are specific enough that they need a direct conversation.

Manufactured homes. These must have been permanently installed on the site for more than 12 months before the case number date.

Second homes and rentals. Neither qualifies. Occupancy decides the leverage, and the FHA cash-out is for the home you live in.

Paid-off homes. A home with no mortgage can still go through an FHA cash-out.

How This Differs From Other FHA Refinances

The FHA Streamline refinances an existing FHA loan, with no appraisal, a limited credit review and a net tangible benefit. It does not test ownership and occupancy the way cash-out does. The FHA rate-and-term refinance, which requires an appraisal, reaches 97.75% on a principal residence occupied for the previous 12 months. The FHA cash-out refinance, capped at 80% LTV on a home owned and occupied for 12 months before the case number, is the strictest of these three because it pulls equity out.

Wait, or Switch Products?

Start with the size of the gap. If you are a few days or weeks from the anniversary, waiting is usually the clean answer. It costs nothing, and an early case number request can cost you appraisal fees.

If you are months away, think about what the cash is for. A borrower who is already in an FHA loan and mainly wants a better term may fit the Streamline. A borrower with an earlier occupancy gap may have to wait out the lookback.

Also check how much room you have. A recent buyer with a small down payment may have little cash-out room even after the wait, because 80% is the ceiling. The cash comes after the old loan, costs and fees are paid.

Before you commit, treat the cash as borrowed money. The CFPB describes a cash-out refinance as replacing your mortgage with a bigger one and giving you the difference in cash, and notes that you often pay closing costs. A larger balance means a larger payment and FHA mortgage insurance on top. Compare the new loan against your current mortgage and against a home equity line.

If some of the proceeds would go toward paying down credit cards, remember that the cash is a tool, not a fix.

Common Misconceptions

• “Twelve months from closing.” The count runs back from case number assignment.
• “The cap is still 85%.” It has been 80% since September 1, 2019.
• “A recorded deed starts the clock.” FHA tests who owned and occupied, not the recording date.
• “A new name on the deed fixes timing.” Generally it does not.
• “Any FHA loan can be cash-out.” The home must be a principal residence.
• “Renting briefly after inheriting is fine.” It can forfeit the exception.

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. Reach the team at 828-256-2183 or through the Lendmire quote page.

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.

References

1. HUD Press Release 19-114 (archive)

2. HUD Mortgagee Letter 2009-08

3. CFPB: Similar to a HELOC