Key takeaways
- 80% of the Adjusted Value is the hard ceiling on an FHA cash-out refinance — it caps both LTV and CLTV. HUD cut it from 85% in Mortgagee Letter 2019-11, effective for case numbers assigned on or after September 1, 2019.
- You must have owned and occupied the home as your principal residence for the 12 months before your case number is assigned. HUD permits cash-out only on owner-occupied principal residences.
- Payment history is the gate most files trip on: every payment on every mortgage, made within the month due, for the previous 12 months, plus a minimum of six payments on the loan being refinanced. A home owned free and clear also qualifies.
- Because 80% LTV sits at or below 90%, annual mortgage insurance is 50 basis points (0.50%) and runs 11 years rather than the full mortgage term. The driver is LTV, not term.
- Clark County's CY2026 one-unit FHA limit is $541,287, which caps the new insured loan however much equity you have. HUD's CY2026 median sale price for Clark County is $462,000.
- A non-occupant co-borrower's income cannot be used to qualify, and on a one-unit home with a casita or other accessory dwelling unit, ADU rent cannot count as effective income on a cash-out.
- The ceiling is 80% of the appraised value, less what you still owe, less costs — not 85%, and not 97.75%.
- You need 12 months of ownership and occupancy plus a clean 12-month mortgage payment record.
- Mortgage insurance applies: 1.75% upfront and 0.50% a year for 11 years at 80% LTV.
- If the plan is to rent the house out afterward, FHA cash-out is the wrong product — and in Nevada it would also cost you the 3% property-tax cap.
Key terms in plain English
FHA cash-out vocabulary does most of the work on this file — four HUD terms in particular, and two of them are commonly misread.
- Cash-out refinance
- A new, fully underwritten FHA loan larger than the one it pays off, with the difference returned to you at closing.
- Adjusted Value
- The figure the 80% is taken from. On a home you have owned 12 months or more it is simply the Property Value — the new appraisal.
- Case number assignment
- The date FHA stamps your file. Almost every seasoning clock on this page is measured backward from it, not from closing.
- Seasoning
- How long something must have been true before FHA will insure the loan — here, how long you have owned it, lived in it, and paid on it.
Can you take cash out of an FHA loan?
An FHA cash-out refinance lets you replace your current mortgage with a larger FHA-insured loan and take the difference in cash, up to 80% of your home's appraised value, provided you have owned and lived in the home as your principal residence for the previous 12 months. It is a fully underwritten loan — full credit qualifying, a new FHA appraisal, and a new mortgage insurance premium — and it does not require your existing loan to be an FHA loan. A Clark County homeowner sitting on a conventional mortgage can refinance into FHA and take cash out, and a homeowner who owns the house free and clear can too.
Three things separate this from every other FHA refinance. The 80% ceiling is the tightest loan-to-value in the FHA refinance lineup — a rate-and-term refinance goes to 97.75% for a borrower who has occupied the home for the previous 12 months. The seasoning is the strictest. And the occupancy requirement is absolute rather than a matter of intent, which is what makes FHA cash-out unusable as a way to pull equity out of a rental.
FHA cash-out is also a genuinely popular product, and HUD's own figures explain why the rules tightened. In the mortgagee letter that reduced the cap, HUD reported that FHA endorsements including a cash-out refinance rose 250.47%, from 43,052 in FY 2013 to 150,883 in FY 2018. That growth is precisely what HUD said it was responding to.
Valley West takeMost Las Vegas homeowners who call us about an FHA cash-out have already done the equity math on a Zillow estimate and are disappointed by the appraisal, not by the 80%. Order the conversation the other way around: the appraisal sets the Adjusted Value, and everything on this page is a percentage of that number. Until it exists, every figure is a guess.
What is the maximum LTV on an FHA cash-out refinance?
The maximum LTV on an FHA cash-out refinance is 80% of the Adjusted Value, and the maximum combined LTV — first mortgage plus any subordinate liens — is also 80%. HUD's current Single Family Housing Policy Handbook 4000.1 states both in two sentences: "The maximum LTV is 80 percent of the Adjusted Value" and "The maximum CLTV is 80 percent of the Adjusted Value." The CLTV half is the one that surprises people: an existing home equity line you intend to keep open counts against the same 80%, so it either gets paid off in the transaction or it eats into your cash.
The 80% figure is relatively recent, and this is where a lot of what you will read online is out of date. FHA allowed 85% until 2019:
"This Mortgagee Letter reduces the current Maximum Loan-To-Value (LTV) and Combined Maximum Loan-To-Value (CLTV) percentages to 80 percent on Cash-out Refinance Mortgages."HUD — Mortgagee Letter 2019-11, Maximum Loan-To-Value and Combined Loan-To-Value Percentages for Cash-out Refinance Mortgages, August 1, 2019 (hud.gov)
That change took effect for case numbers assigned on or after September 1, 2019. Anything still quoting 85% is describing pre-2019 policy — including, as it happens, older printings of the handbook itself, which is why the edition matters as much as the document.
What is the Adjusted Value the 80% applies to? On a home you have owned for 12 months or longer — which a cash-out requires anyway — HUD defines it as simply the Property Value, meaning the value the FHA appraiser concludes. There is no purchase price in the calculation and no averaging. That makes the FHA appraisal the single most consequential document in the file: it is the number your entire cash-out is a fraction of. One more constraint sits above the percentage — the new loan also cannot exceed the FHA limit for the county, covered in the 2026 FHA loan limits for Clark County.
How much cash can you actually take out on a Las Vegas home?
Your gross cash on an FHA cash-out refinance is 80% of the appraised value minus your current mortgage balance, before closing costs and the upfront mortgage insurance premium come out of it. Work it once with HUD's own Clark County number and the shape becomes obvious. HUD's CY2026 dataset puts the median sale price in Clark County at $462,000. Eighty percent of $462,000 is $369,600. If you owe $300,000, the gross cash before costs is $69,600 — and the new loan is comfortably inside Clark County's $541,287 one-unit FHA limit. These figures are illustrative only and are not a quote, offer, or commitment to lend.
Two subtractions then apply to that gross figure, and neither is optional. Closing costs come off it — see FHA closing costs in Las Vegas for what actually appears on a Clark County settlement statement. And the upfront mortgage insurance premium of 1.75% is added to the loan balance, which means it is funded out of the same 80%. Neither of those changes the ceiling; they change what reaches your bank account.
FHA cash-out ceiling estimator
Enter the value you expect the FHA appraiser to conclude and what you currently owe. This applies HUD's 80% maximum LTV and checks the result against Clark County's 2026 one-unit FHA limit. Nothing is stored or transmitted.
Illustrative only, not a quote, offer, or commitment to lend. This estimator applies only HUD's 80% maximum LTV and the Clark County one-unit limit; it does not deduct closing costs, prepaids, or the 1.75% upfront mortgage insurance premium, and it is not an underwriting decision. Your Adjusted Value is set by the FHA appraisal, not by an estimate.
What are the FHA cash-out seasoning requirements?
FHA cash-out seasoning has three separate clocks: 12 months of ownership and occupancy, a 12-month clean payment record on every mortgage you hold, and a minimum of six mortgage payments actually made on the loan being refinanced. All three are measured against the date your case number is assigned, not your closing date, and they are cumulative rather than alternatives. This is the part of the product that stops most early refinances, and it is worth separating the two twelves — one counts how long you have held the home, the other counts how you have paid.
HUD's payment-history standard covers all the mortgages you hold, not just the one on this property — so a late payment on a second home or a rental inside that 12-month window is a problem on this file too (the table below carries HUD's exact wording). Payments on the subject property itself must also be current through the month before disbursement.
Then the floor on payments made: subject properties with mortgages must have a minimum of six months of mortgage payments on the current loan, and properties owned free and clear may be refinanced as cash-out transactions. The free-and-clear case is worth naming plainly because it surprises people — no existing mortgage is not a disqualifier, it is expressly permitted.
One more clock: after a forbearance, a cash-out needs 12 consecutive on-time payments since the plan ended, against just three for a rate-and-term (see the table below). If you exited forbearance recently, the rate-and-term path can open up months before cash-out does.
| Gate | HUD's standard |
|---|---|
| Ownership and occupancy | Owned and occupied by at least one borrower as their principal residence for the 12 months prior to case number assignment |
| Payment history | All payments on all mortgages made within the month due for the previous 12 months, or since obtained, whichever is less |
| Payments made on the current loan | Minimum six months of mortgage payments; a property owned free and clear is eligible |
| After a forbearance | Forbearance plan completed, plus 12 consecutive payments within the month due since completing it (rate-and-term needs three) |
| Manufactured home | Permanently installed on a site for more than 12 months prior to case number assignment |
Two other eligibility lines belong here because they are absolute rather than time-based. Nonprofit agencies, state and local government agencies, and instrumentalities of government are not eligible for cash-out refinances at all. And temporary interest-rate buydowns are not permitted on any refinance transaction, so a seller-paid or lender-paid buydown structure is off the table on this product.
What are the occupancy requirements for an FHA cash-out refinance?
An FHA cash-out refinance is permitted only on a home you own and occupy as your principal residence, and you must have occupied it for the 12 months before case number assignment. HUD states both requirements together, and there is no intent language to work with — unlike a purchase, where the standard is occupancy within 60 days and intent to stay a year, a cash-out looks backward at a year you have already lived there:
"Cash-out refinance transactions are only permitted on owner-occupied Principal Residences. The Property securing the cash-out refinance must have been owned and occupied by at least one Borrower as their Principal Residence for the 12 months prior to the date of case number assignment."HUD — FHA Single Family Housing Policy Handbook 4000.1, Update 17 (Last Revised November 26, 2025), Cash-Out Refinances, Occupancy Requirements (hud.gov)
Your lender proves it with documents, not with a declaration: HUD directs the mortgagee to review employment documentation or obtain utility bills evidencing that you occupied the property as your principal residence for those 12 months. Utility bills in your name at that address are the usual evidence, which is a good reason not to have everything in a spouse's name only.
There is one exception, and it is narrow. A borrower who inherited the property does not have to satisfy a minimum occupancy period first — provided the property has not been treated as an investment property at any point since the inheritance. If it was rented out after being inherited, the 12-month owner-occupancy clock restarts and must run before a cash-out is possible. The wider set of FHA occupancy questions, including what you can and cannot rent out, is covered in the FHA occupancy rules that decide what you can rent.
Two related restrictions catch Las Vegas homeowners specifically. First, income:
"Income from a non-occupant co-Borrower may not be used to qualify for a cash-out refinance."HUD — FHA Single Family Housing Policy Handbook 4000.1, Update 17 (Last Revised November 26, 2025), Cash-Out Refinances, Borrower Eligibility (hud.gov)
A parent or sibling who helped you qualify for the original purchase as a non-occupant co-borrower cannot help you qualify for the cash-out. Second, and very local: on a one-unit property with an accessory dwelling unit, HUD says rental income from the ADU cannot be used as effective income to qualify for a cash-out refinance. Casitas and converted garages are common in the valley, and the rent one produces will not raise the income side of your file on this product — which puts more weight on your FHA debt-to-income ratio as it already stands.
What credit score do you need for an FHA cash-out refinance?
FHA itself sets no special credit-score minimum for a cash-out refinance — the program floor applies: a minimum decision credit score below 500 is ineligible, 580 and above is eligible for maximum financing, and 500 to 579 is capped at 90% LTV. Because a cash-out is already capped at 80%, that 90% ceiling never binds, so HUD's own rules do not add a credit barrier at cash-out that a purchase does not have. Individual lenders and investors do set their own higher minimums on this product, and they are usually higher than the program floor — so treat 580 as HUD's line, not as an approval threshold.
Two mechanics are worth knowing before you pull a report. The minimum decision credit score is the median of three scores, the lower of two, or the only score reported; where there are multiple borrowers, the lender takes the lowest borrower's score. And a cash-out is fully credit-qualifying — there is no reduced-documentation path here, so income, assets, and debts are all verified. The full picture of how FHA reads a credit file is in FHA credit score requirements in Las Vegas.
The 12-month all-mortgages payment record from the section above interacts with this in a way that catches people. A score can recover from a rough patch faster than a payment history does. If a mortgage late landed inside the last 12 months, the score may look fine while the file is still ineligible — the payment record is a separate test, not an input to the score.
What does mortgage insurance cost on an FHA cash-out refinance?
An FHA cash-out refinance carries an upfront mortgage insurance premium of 1.75% of the base loan amount plus an annual premium of 0.50% that runs for 11 years, not the full mortgage term. That 11-year duration is the quietly favorable part of this product, and it follows directly from the 80% cap. HUD’s premium table is driven by loan-to-value, not by loan term — the single most commonly mangled fact about FHA mortgage insurance. At 90.00% LTV or below on a term longer than 15 years the annual premium is 50 basis points for 11 years; the 55 basis point rate applies only above 95.00% LTV and cannot occur on a cash-out at all, since the product is capped at 80%. Appendix 1.0 prints the tier threshold as a base loan amount at or below $726,200, and Clark County’s one-unit FHA maximum of $541,287 sits under that regardless, so a Clark County one-unit cash-out is always in the cheaper tier. These are HUD’s published program parameters, shown as general information and not as a quote, offer, or commitment to lend.
One credit is easy to miss. If you are refinancing an existing FHA-insured mortgage into another FHA-insured mortgage within three years, HUD applies a refund credit against the upfront premium on the new loan, on a published month-by-month schedule that starts at 80% in the first month and declines from there. It reduces the UFMIP added to your balance, which means it directly increases the cash that reaches you. Ask for it to be shown on the worksheet rather than assuming it was applied. The broader mechanics — and every route out of FHA insurance — are in how FHA MIP works in Las Vegas and in the math on refinancing out of FHA MIP.
Valley West takeIf you are already at or near 80% LTV and your credit has improved since you bought, the honest question is not FHA cash-out versus FHA streamline — it is whether a conventional cash-out gets you out of mortgage insurance entirely. We run both worksheets side by side, because on a file with real equity and a repaired score, the FHA product sometimes loses on cost and we would rather tell you that.
FHA cash-out, FHA streamline, or conventional cash-out?
Choose an FHA cash-out refinance when you need money out of the house and your credit or documentation makes conventional financing difficult; choose an FHA streamline when you want to keep your existing FHA loan and take no cash; choose a conventional cash-out when you have enough equity and credit strength to leave mortgage insurance behind. The three products are not tiers of the same thing — they answer different questions, and only one of them puts money in your hand.
The streamline is the sharpest contrast. It is a low-documentation refinance of an existing FHA loan, often without a new appraisal, and it returns essentially no cash to the borrower. If cash is the goal, the streamline is structurally the wrong tool no matter how attractive its process is; details are in the FHA streamline refinance guide. A conventional cash-out, by contrast, is worth pricing whenever your equity and score allow it, because it can end monthly mortgage insurance rather than restart an 11-year clock — the conventional side of that comparison lives on our sister site's Las Vegas cash-out refinance guide. How refinancing decisions get framed across all of our loan types is laid out on our parent company's refinance desk.
| Question | FHA cash-out | FHA streamline | Conventional cash-out |
|---|---|---|---|
| Cash to you? | Yes, up to 80% LTV | No — not a cash-out product | Yes, limits set by the investor |
| Existing loan must be FHA? | No | Yes | No |
| New appraisal? | Yes, always | Often not required | Yes, in nearly all cases |
| Full credit qualifying? | Yes | Reduced documentation | Yes |
| Mortgage insurance | 1.75% upfront plus 0.50% a year for 11 years at 80% LTV | Continues under FHA rules | None once you are at or below 80% LTV |
| Must you live there? | Yes — owner-occupied principal residence only | Occupancy rules apply by type | Investor-occupancy options exist |
One item belongs on the checklist whichever path you take: your hazard insurance has to be in force and adequate at closing, and a refinance is a natural moment to re-shop it rather than let it roll. Our sister company can handle that side — Las Vegas homeowners coverage — so insurance is not the item that delays your closing. If you are still deciding whether FHA is the right program at all, our FHA loans in Las Vegas hub is the place to start, and the statewide 2026 Nevada FHA guide covers the counties outside Clark.
Want the real number instead of an estimate?
We will run your FHA cash-out worksheet against the 80% cap, the 12-month seasoning, and the Clark County limit, and tell you plainly if a conventional cash-out would cost you less. No obligation; options subject to approval. Not affiliated with or endorsed by HUD, the FHA, or any government agency.
Start your refinance reviewDoes a cash-out refinance reset your Nevada property-tax cap?
A cash-out refinance does not by itself reset Nevada's 3% property-tax cap, because refinancing conveys no title — but renting the house out afterward does cost you the cap, and it would also breach the FHA occupancy requirement. This is Nevada-specific and it is the question Clark County homeowners ask us most often about any refinance, usually with real anxiety attached, so it is worth answering from the statutes rather than from folklore.
Start with what a refinance legally is. Nevada's real property transfer tax attaches to a transfer of title by deed, and the statutory definition of "deed" expressly excludes "a deed of trust or common-law mortgage instrument that encumbers real property" — so recording a new deed of trust is not a conveyance, and there is no transfer and no new owner. The cap follows the same logic. NRS 361.4723 entitles the owner of a single-family residence that is the owner's primary residence to a partial abatement holding the annual ad valorem increase to 3%, while property that does not qualify falls under NRS 361.4722 and its 8% ceiling. The statute says an owner does not lose eligibility because of "the manner in which title is held by the owner if the owner occupies the residence" — and is equally explicit about what does disqualify, defining the primary residence as one "not rented, leased or otherwise made available for exclusive occupancy" by anyone other than the owner and their family.
Read the two rulebooks together and they point the same way. FHA requires the home to be your owner-occupied principal residence for the cash-out to be permitted at all. Nevada requires it to be your unrented primary residence for the 3% cap to hold. The move that breaks one breaks the other, and the tax consequence arrives annually and permanently while the loan consequence is a certification you signed. The Clark County mechanics — how the abatement is claimed and how it shows up in your escrow — are in Clark County property taxes on an FHA loan. This is general information about Nevada law, not tax advice; confirm your own situation with the Clark County Assessor or a tax professional.
Frequently asked questions
What is the maximum LTV on an FHA cash-out refinance?
The FHA cash-out refinance is capped at 80 percent. HUD Handbook 4000.1 sets both the maximum LTV and the maximum combined LTV at 80 percent of the Adjusted Value on a cash-out refinance. HUD reduced the figure from 85 percent in Mortgagee Letter 2019-11, effective for case numbers assigned on or after September 1, 2019, so any source still quoting 85 percent is describing pre-2019 policy. This is general information, not a quote, offer, or commitment to lend.
What are the FHA cash-out seasoning requirements?
Three separate clocks, all measured back from the date your case number is assigned. You must have owned and occupied the home as your principal residence for the previous 12 months. You must have made all payments on all of your mortgages within the month due for the previous 12 months, or since you obtained them, whichever is less. And the property must have a minimum of six months of mortgage payments on the current loan, although a property owned free and clear is expressly eligible.
Can you take cash out of an FHA loan if you do not live in the home?
No. HUD Handbook 4000.1 states that cash-out refinance transactions are only permitted on owner-occupied principal residences, and that the property must have been owned and occupied by at least one borrower as their principal residence for the 12 months prior to case number assignment. Your lender documents this with employment records or utility bills, not with a declaration. There is a narrow exception for inherited property that has never been treated as an investment property.
Does an FHA cash-out refinance require an appraisal?
Yes. An FHA cash-out refinance is fully underwritten and requires a new appraisal by an FHA-approved appraiser. The appraisal matters more here than on most transactions because on a home owned 12 months or longer HUD defines the Adjusted Value as the Property Value, so the appraiser's conclusion is the figure your entire 80 percent ceiling is calculated from.
What credit score do you need for an FHA cash-out refinance?
FHA sets no special cash-out minimum, so the program floor applies: a minimum decision credit score below 500 is ineligible, 580 and above is eligible for maximum financing, and 500 to 579 is capped at 90 percent LTV. Because a cash-out is already capped at 80 percent, that 90 percent ceiling never binds. Individual lenders and investors set their own higher minimums on this product, so 580 is HUD's line rather than an approval threshold.
How much is mortgage insurance on an FHA cash-out refinance?
The upfront premium is 175 basis points, or 1.75 percent, of the base loan amount. The annual premium at an LTV at or below 90 percent on a term longer than 15 years is 50 basis points, or 0.50 percent, and it lasts 11 years rather than the mortgage term. Because a cash-out cannot exceed 80 percent LTV, it always falls in that row; the 55 basis point rate applies only above 95 percent LTV and cannot occur on a cash-out. These are HUD's published program parameters, not a quote, offer, or commitment to lend.
Can a non-occupant co-borrower help you qualify for an FHA cash-out refinance?
No. HUD Handbook 4000.1 states that income from a non-occupant co-borrower may not be used to qualify for a cash-out refinance. Separately, if the property is a one-unit home with an accessory dwelling unit, rental income from the ADU cannot be used as effective income to qualify for a cash-out either.
Does refinancing reset the 3 percent property-tax cap in Nevada?
Refinancing does not by itself reset it. Nevada's transfer-tax statute excludes a deed of trust from the definition of a deed, so a refinance conveys no title and creates no new owner. What does cost you the cap is renting the home out: NRS 361.4723 conditions the 3 percent abatement on the home being the owner's primary residence and not rented, leased, or otherwise made available for exclusive occupancy by anyone other than the owner and their family, and property outside that definition falls under the 8 percent ceiling instead. This is general information about Nevada law, not tax advice.
The bottom line
An FHA cash-out refinance works for a Las Vegas homeowner who needs the money and can clear three bars most people underestimate: 12 months of ownership and occupancy, a clean 12-month payment record on every mortgage you hold, and an appraisal that actually supports 80% of value once you subtract what you still owe. It is not a way to fund a rental — the FHA occupancy rule and Nevada's 3% property-tax cap punish that move the same way, on the same day you sign a lease. And it is not the only door: if your credit has recovered and you are already near 80%, price a conventional cash-out beside it before you commit. If your numbers clear those three bars, the next step is a real Adjusted Value from an FHA appraiser rather than an estimate. Everything here is general information, not a quote, offer, or commitment to lend.
Sources
- HUD — FHA Single Family Housing Policy Handbook 4000.1, Update 17 (Last Revised November 26, 2025): cash-out refinance borrower eligibility, non-occupant co-borrower income, ADU rental income, occupancy requirements, payment history, minimum six payments and free-and-clear eligibility, forbearance seasoning, maximum 80% LTV and CLTV, Adjusted Value for refinances, minimum decision credit score, UFMIP refund schedule, and Appendix 1.0 mortgage insurance premiums: hud.gov
- HUD — Mortgagee Letter 2019-11, Maximum Loan-To-Value and Combined Loan-To-Value Percentages for Cash-out Refinance Mortgages (August 1, 2019): the reduction from 85% to 80%, effective for case numbers assigned on or after September 1, 2019, and FHA cash-out endorsement volumes for FY 2013 and FY 2018: hud.gov
- HUD — Mortgagee Letter 2023-05, Reduction of FHA Annual Mortgage Insurance Premium Rates (February 22, 2023): 1.75% UFMIP and the annual MIP table by LTV and term: hud.gov
- HUD — FHA Mortgage Limits lookup, CY2026 FHA Forward limits for Clark County, Nevada (mortgage maximums as of January 1, 2026): one-unit $541,287 and the county median sale price of $462,000: entp.hud.gov
- Nevada Revised Statutes — NRS 375.010, definitions for the tax on transfers of real property, excluding a deed of trust from the definition of "deed": leg.state.nv.us
- Nevada Revised Statutes — NRS 361.4722 and NRS 361.4723, the 8% general and 3% owner-occupied partial abatements of ad valorem taxes, including the definition of the owner's primary residence: leg.state.nv.us
- CFPB — Consumer guidance on owning a home and refinancing decisions: consumerfinance.gov