What an FHA Cash-Out Refinance Is
An FHA cash-out refinance replaces your existing mortgage with a new, larger FHA-insured loan and returns the difference to you in cash. Because it's government-backed, it tends to accept lower credit scores than a conventional cash-out, making it a path to equity for borrowers who might not qualify elsewhere.
Who It's For
- Homeowners with substantial equity but credit that falls short of conventional cash-out standards
- Borrowers who want to consolidate higher-interest debt into their mortgage
- Owners funding renovations, education, or other large expenses
- Those already in an FHA loan looking to access equity
How It Works
FHA cash-out refinances typically allow you to borrow up to 80% of your home's appraised value. You receive the difference between your new loan and your current payoff, minus closing costs, as cash. The new loan carries FHA mortgage insurance, which is the trade-off for the program's flexible qualification. Whether the math works depends on your equity, the rate environment, and how you'll use the funds.
Frequently Asked Questions
How much cash can I get from an FHA cash-out refinance?
Generally up to 80% of your home's appraised value, minus your current loan payoff and closing costs. Your actual amount depends on your equity and the appraisal.
What credit score do I need?
FHA cash-out programs are often more flexible than conventional, but lender requirements vary. Many lenders look for mid-600s or higher for cash-out specifically. We can compare lenders to find the best fit for your profile.
Does an FHA cash-out require mortgage insurance?
Yes. FHA loans carry both an upfront and annual mortgage insurance premium. That cost is the trade-off for FHA's flexible credit standards, and it factors into whether the refinance makes sense for you.
Can I do an FHA cash-out if my current loan is conventional?
Yes — you can refinance a conventional loan into an FHA cash-out, as long as you and the property qualify under FHA guidelines.
Is a cash-out refinance the same as a HELOC?
No. A cash-out refinance replaces your entire mortgage with one new loan. A HELOC is a separate second loan/line against your equity. Which is better depends on your current rate and how you want to access funds — we can walk through both.