What Is the FHA Cash Out Max LTV in 2026?
The FHA cash out max LTV is 80% of your home’s appraised value. That ceiling has been in place since September 1, 2019, when HUD reduced it from 85% — and it has not changed for 2026. Your new FHA loan cannot exceed 80% of what a new appraisal says the property is worth, which means you must retain at least 20% equity after closing.
The math is straightforward. On a $400,000 appraised value, 80% produces a maximum loan of $320,000. If you currently owe $250,000, your gross cash out is $70,000 before closing costs and prepaid items come out of the proceeds.
That 80% figure is a hard HUD ceiling. No lender exceeds it, no credit score unlocks more, and no compensating factor moves it.
FHA Cash Out Refinance Loan to Value Requirements
The LTV cap is one of five requirements that determine your maximum loan. All five must clear.
1. The 80% LTV ceiling. Calculated against a new appraisal, not your purchase price or your tax assessment. FHA requires a fresh appraisal on every cash out refinance — there is no appraisal waiver on this product.
2. FHA county loan limits. Even if 80% LTV supports a larger loan, you cannot exceed the FHA limit for your county. For 2026 the baseline is $541,287 for a single-family home in most markets, rising to $1,249,125 in HUD-designated high-cost areas and $1,873,625 in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.
3. Twelve months of ownership and occupancy. The property must have been your primary residence for at least 12 months. Investment properties and second homes are ineligible for FHA cash out entirely.
4. Payment history. Expect to document six to twelve months of on-time payments on your existing mortgage, depending on your lender.
5. Debt-to-income ratio. FHA allows up to 43% in most cases. Borrowers with a 580+ score and documented compensating factors — substantial reserves, long employment history, residual income — can sometimes reach 50%, and a handful of lenders extend further with automated approval.
One point worth understanding: the 80% cap applies to your base loan amount. The 1.75% upfront mortgage insurance premium can be financed on top, so your total loan balance will exceed 80% of value even though your base loan does not.
For a broader view of equity options, see our guide to home equity loans.
What Is the Max LTV for an FHA Cash Out Refinance With a 580 Credit Score?
80% — the same as every other credit score. FHA sets one cash out ceiling and applies it uniformly. A 580 borrower and an 800 borrower can both access 80% of appraised value, and no score unlocks more.
What credit score actually controls is approval, not access. It determines whether a lender will write the loan and what you’ll pay for it — never how much equity you can reach.
What Is the Max LTV for FHA Cash Out With a 500 Credit Score?
If you can find a lender, the maximum LTV is still 80%. FHA does not reduce the cash out ceiling for lower scores.
The practical problem is availability. FHA’s absolute program floor is 500, but lenders willing to originate cash out refinances at that level are rare. Cash out is the highest-risk FHA refinance product, and most institutions apply their strictest overlays to it.
A realistic assessment at 500 to 579:
- Expect most lenders to decline. The 620 overlay is the industry norm.
- Portfolio and non-QM lenders are more likely to consider the file, at higher cost.
- Pricing will reflect the risk — expect a meaningful premium over standard FHA pricing.
- Improving your score first is usually the better strategy. Moving from 540 to 580 can take 60 to 90 days with focused work on utilization and dispute resolution, and it changes which lenders will look at you.
For borrowers whose credit has been damaged, our FHA home loans section covers program requirements in more depth.
Case Study: Consolidating Credit Card Debt at 620 Credit
Illustrative example based on typical file structures. Figures demonstrate the mechanics; individual results vary by lender, market, and borrower profile.
The borrower. A warehouse operations supervisor in Ohio, married, two children, 620 FICO. Purchased the home in 2021 with an FHA loan and has made every payment on time since.
The problem. Roughly $48,000 in credit card balances spread across five accounts, accumulated over three years covering a medical event and a period of reduced hours. Minimum payments totaled about $1,320 a month, nearly all of it interest. His balances hadn’t declined in eighteen months.
Why conventional didn’t work. With $6,400 in monthly gross income and $3,615 in total monthly obligations, his DTI stood at 56.5% — well beyond conventional cash out guidelines, which also require a 620 minimum with tighter overlays.
The FHA structure:
| Item | Amount |
|---|---|
| Appraised value | $385,000 |
| Maximum loan at 80% LTV | $308,000 |
| Existing FHA balance | $242,000 |
| Gross cash out | $66,000 |
| Closing costs and prepaids | ~$7,700 |
| Net proceeds | ~$58,300 |
| Credit cards retired | $48,000 |
| Remaining reserve | ~$10,300 |
What changed:
| Before | After | |
|---|---|---|
| Mortgage payment (PITI + MIP) | $1,850 | $2,290 |
| Credit card minimums | $1,320 | $0 |
| Auto loan | $445 | $445 |
| Total monthly obligations | $3,615 | $2,735 |
| DTI | 56.5% | 42.7% |
Monthly improvement: approximately $880.
Why FHA rather than conventional or a HELOC. Three reasons. His 620 score cleared FHA’s lender overlay but sat at the edge for conventional cash out. FHA’s DTI flexibility accommodated the file where conventional guidelines would not. And FHA mortgage insurance is not priced by credit score — the premium is identical at 620 as at 780, whereas conventional PMI would have penalized his score heavily.
The honest tradeoffs. He converted unsecured debt into debt secured by his home — credit card default damages credit, mortgage default risks foreclosure. He extended a $48,000 obligation across a 30-year amortization. And he added FHA mortgage insurance to a payment that previously carried it at a lower balance.
The discipline requirement. We built one condition into the plan: he closed three of the five card accounts and kept two open with zero balances, to preserve credit age without preserving temptation. Consolidation only works if the balances stay at zero. Borrowers who consolidate and then re-accumulate end up worse off than when they started, because the equity is gone.
To compare against a second-lien approach, review our HELOC and home equity options.
Frequently Asked Questions
What is the FHA cash out refinance max LTV in 2026?
80% of appraised value. HUD reduced the ceiling from 85% effective September 1, 2019, and it remains at 80% in 2026. Your new base loan cannot exceed 80% of a current appraisal, meaning you must retain at least 20% equity after closing. The cap is calculated on a new appraisal — FHA requires one on every cash out refinance and offers no waiver. The upfront mortgage insurance premium of 1.75% may be financed above the 80% base loan.
Does the FHA cash out LTV change based on my credit score?
No. The 80% ceiling is a HUD program limit that applies uniformly. A borrower at 500 and a borrower at 800 face the identical cap. What credit score affects is whether you’re approved and what you pay — lenders set their own minimum scores, commonly 620, and price the loan accordingly. Some lenders voluntarily reduce maximum LTV for lower-score borrowers as an internal risk measure, but that’s an overlay, not an FHA rule.
How much cash can I actually get from an FHA cash out refinance?
Multiply your appraised value by 0.80, then subtract your current mortgage balance. On a $400,000 home with a $250,000 balance, that’s $320,000 minus $250,000 — $70,000 gross. From that, subtract closing costs and prepaid items, typically 2% to 5% of the loan amount. Your net proceeds are meaningfully lower than the gross figure, which is why borrowers should calculate on net rather than budgeting against the gross number.
What is the max LTV for an FHA rate and term refinance?
97.75% — substantially higher than the 80% cash out limit. Rate-and-term refinances change your rate or term without providing cash beyond a small incidental amount, so FHA permits far higher leverage. If your goal is a lower payment rather than cash in hand, rate-and-term is the better structure and requires far less equity. FHA Streamline refinancing offers a further simplified path for existing FHA borrowers.
How long must I own the home before an FHA cash out refinance?
Twelve months. The property must have been your principal residence for at least 12 months before the case number assignment date, and you’ll need to document six to twelve months of on-time payments depending on your lender. Investment properties and second homes are ineligible for FHA cash out under any circumstances — the program is limited to owner-occupied primary residences.
This article is for general informational purposes and is not individualized financial advice. FHA guidelines, lender overlays, and loan limits are subject to change. Consult a licensed mortgage professional regarding your specific situation.
References
- U.S. Department of Housing and Urban Development. (2026). FHA mortgage limits.
- RefiGuide.org. (2026, July 1). FHA cash-out refinance: What you need to know in 2026.
- U.S. Department of Housing and Urban Development. (2019, August 1). Mortgagee Letter 2019-11: Maximum loan-to-value and combined loan-to-value percentages for cash-out refinance mortgages.