FHA Cash-Out Refinance Guidelines
Complete requirements and eligibility criteria for 2025
FHA cash-out refinance guidelines are designed to help homeowners access their equity while maintaining responsible lending standards. These guidelines ensure borrowers can comfortably afford their new mortgage while accessing needed funds. Understanding these requirements is essential for a successful application.
Basic Eligibility Requirements
Property Requirements
- Primary Residence Only
Must be your primary home for at least 12 months
- Property Types Allowed
Single-family homes, FHA-approved condos, 2-4 unit properties (if owner-occupied)
- Ownership Period
Must have owned and occupied for 12+ months
- Not Eligible
Investment properties, second homes, manufactured homes (in some cases)
Credit and Financial Requirements
Credit Score
Minimum 580 for maximum cash-out
500-579 may have restrictions
Debt-to-Income
Maximum 43% DTI ratio
Some exceptions with compensating factors
Payment History
No late payments in past 12 months
On current mortgage
Loan-to-Value
Maximum 80% LTV
Based on current appraised value
Loan Limits and Maximum Amounts
2025 Bergen County FHA Limits
Single-Family Home
$835,300
2-Unit Property
$1,069,600
3-Unit Property
$1,292,650
4-Unit Property
$1,607,150
Important LTV Restriction
While standard FHA loans allow up to 96.5% LTV, cash-out refinances are limited to 80% LTV maximum. This means you must have at least 20% equity remaining after the refinance.
Required Documentation
Income Documentation
- Two years of W-2s or tax returns
- Recent pay stubs (30 days)
- Bank statements (2 months)
- Employment verification
Property Documentation
- Current mortgage statement
- Homeowners insurance policy
- Property tax statements
- HOA documents (if applicable)
Credit Documentation
- Credit report authorization
- Explanation of credit issues
- Proof of resolved collections
- Bankruptcy/foreclosure docs
Additional Documents
- Government-issued ID
- Social Security card
- Divorce decree (if applicable)
- Gift letter (if using gift funds)
Special Considerations
Seasoning Requirements
- • Must have owned the property for at least 12 months
- • Must have made at least 6 mortgage payments on current FHA loan
- • No cash-out allowed within first 12 months of ownership
- • Payment history must show no 30-day late payments in past year
Mortgage Insurance (MIP)
- • Upfront MIP: 1.75% of loan amount (can be financed)
- • Annual MIP: 0.55% - 1.05% depending on loan terms
- • MIP cannot be removed if LTV > 90% at origination
- • MIP required for life of loan on most cash-out refinances
Appraisal Requirements
- • FHA appraisal required (valid for 120 days)
- • Property must meet FHA minimum property standards
- • Any required repairs must be completed before closing
- • Appraisal determines maximum loan amount based on value
Ready to Apply?
Our FHA specialists can guide you through the entire process and ensure you meet all guidelines.
Guidelines subject to change. This information is for educational purposes only. Final loan approval depends on meeting all FHA and lender requirements. Terms subject to credit approval. NMLS #1577754 | Equal Housing Lender