FHA Cash Out Rules

There are a few simple rules when talking about an FHA cash out loan, so be sure to become familiar with the guidelines. While I am here to help, it doesn’t hurt for you at have the information at your fingertips, and I make it available to you on my website.



FHA cash out loans are ideal for those who have some equity in their home, so not everyone will be able to get this. You will need to have been in your home for at least a year prior to the new loan application. If you haven’t been in the home for at least 12 months, then the new loan will be capped at 85% LTV. What this means, is that you cannot take a loan for more than 85% of the value of your home. In this case though, FHA will normally take the lower appraisal value, so keep that in mind.



One other important factor of the FHA cash out loan is that they will want to see a positive payment history on your record. They want to see payments no more than 30 days late, but naturally they really don’t want to see any late payments at all.



FHA Cash out loans are great for any borrower to choose, but they put guidelines in place to ensure that we don’t end up with another economic crisis.