FHA Refinance LTV Limits: Cash-Out, Simple, and Streamline

FHA refinance LTV limits run from 80 percent up to 97.75 percent, and one program has no traditional loan-to-value cap at all. Which ceiling applies depends entirely on which of the three FHA refinance programs you use: 80 percent for a cash-out refinance, 97.75 percent for a simple (no-cash-out) refinance, and no LTV test on a streamline refinance of an existing FHA loan. The appraised value sets the denominator, your new loan balance sets the numerator, and the resulting ratio decides not just whether you qualify but how much you’ll pay in mortgage insurance for years to come.

Cash-Out Refinance: 80 Percent

If you want to pull equity out as cash, the FHA caps your new loan at 80 percent of the home’s current appraised value.¹ You need at least 20 percent equity left in the property after closing. A licensed appraiser establishes the value, and that figure — not what you paid, not what the tax assessor says, not your last appraisal — becomes the number the 80 percent is calculated against.

Everything has to fit inside that ceiling: your existing mortgage payoff, the cash you want in hand, and all closing costs. Take a home that appraises at $400,000. Eighty percent gives you a $320,000 maximum loan. If your current payoff is $280,000 and closing costs come to $6,000, that leaves roughly $34,000 in cash. Want more cash than fits? You lower the cash request until the total lands at or below $320,000. The cap comes directly from HUD, so no lender has room to bend it.

The property must be your primary residence, and you need at least six months of on-time payments on the current mortgage before applying. Cash-out carries the highest risk of the three programs, which is why the guardrails are tighter.

Simple (No-Cash-Out) Refinance: 97.75 Percent

If your goal is a better rate or a different term and you’re not taking cash out, the FHA simple refinance lets you go all the way to 97.75 percent LTV. You need only about 2.25 percent equity.² The program is open to borrowers moving from a conventional or FHA loan into a new FHA-insured mortgage.

The maximum mortgage is the lesser of 97.75 percent of appraised value or the total of your existing debt.² Existing debt includes the first mortgage payoff, any second liens, closing costs, prepaid expenses, and the upfront mortgage insurance premium. If you owe $190,000 on a home that appraises for $200,000, you’re at 95 percent LTV and well within the cap.

Because an appraisal is required, the simple refinance leans on your home’s current value. A sharp decline since you bought shrinks the denominator and can push you past 97.75 percent even if you’ve been paying down principal.

Streamline Refinance: No Traditional LTV Cap

The streamline refinance, available only on existing FHA loans, usually requires no appraisal at all. With no current value, there’s no LTV to measure, so the standard ceiling does not apply.³ That makes it the practical option for underwater or low-equity homeowners who just want a lower payment.

Instead of an LTV test, the new loan is capped by the outstanding principal balance of the FHA loan being refinanced.³ One catch: closing costs cannot be rolled into the new balance on a streamline.⁴ You either pay them out of pocket or accept a slightly higher rate under a “no cost” structure. Cash back to the borrower is limited to $500.

In exchange for the flexibility, the streamline has to clear a net tangible benefit test. Your new combined monthly payment of principal, interest, and mortgage insurance must come in at least 5 percent below your current payment.⁵ If rates haven’t moved enough since you closed your current loan, you may not pass. Streamlines come in credit-qualifying and non-credit-qualifying versions, and the non-credit-qualifying option skips income verification and credit review entirely.⁴

How Your LTV Drives Mortgage Insurance Cost

Clearing the LTV ceiling is only part of the story. Your LTV at origination also controls how much annual mortgage insurance you pay and, more importantly, how long you pay it. The duration difference is where the real money is.

On loans with terms longer than 15 years, the line sits at 90 percent LTV. Start at or below 90 percent and annual MIP falls off after 11 years. Start above 90 percent and MIP runs for the full life of the loan.⁶ Over a 30-year mortgage, that gap runs into tens of thousands of dollars.

The annual rate itself also shifts with LTV. On a typical 30-year FHA loan at or below the standard loan amount, borrowers at or below 95 percent LTV pay 0.50 percent of the balance per year; above 95 percent, it’s 0.55 percent. Higher loan amounts carry steeper rates.

This is the structural upside of a cash-out refinance. Because the program caps you at 80 percent, every cash-out borrower automatically lands in the 11-year MIP bucket and the lowest annual rate tier. Simple-refinance borrowers who stretch to 97.75 percent are locked into lifetime MIP by default. If you’re close to 90 percent on a no-cash-out refinance, bringing enough cash to closing to get under that line can be worth more than any rate shopping.

Every FHA refinance also carries an upfront mortgage insurance premium of 1.75 percent of the base loan amount, no matter which program you use.⁷ On a $300,000 refinance that’s $5,250. For no-cash-out and simple refinances, the UFMIP is typically financed into the loan, which bumps your total balance and your effective LTV. If you were sitting right at the program limit, this can nudge you over.

County Loan Limits Can Override Your LTV Math

Even when your LTV fits the program, your new mortgage can’t exceed the FHA loan limit for your county. For 2026, the floor for single-family homes is $541,287 and the ceiling in high-cost areas is $1,249,125.⁸ Most counties sit somewhere in between based on local median prices.

Streamlines are the exception. They aren’t subject to current loan limits because the maximum is tied to your existing balance, not a new valuation.³ If your original FHA loan was $600,000 in a high-cost county and the limit has since dropped, you can still streamline at that balance. For cash-out and simple refinances, the county limit sits on top of the LTV calculation as a hard cap — whichever is lower wins.

Seasoning: How Long Before You Can Refinance

You can’t refinance an FHA loan right after closing it. The waiting periods vary by program, and missing them is one of the common reasons applications get rejected up front.

A streamline refinance requires all three of these: at least six monthly payments made, at least six months since your first payment was due, and at least 210 days since the closing date of your current FHA loan.³ The three clocks run independently; the last one to expire sets your date. If you assumed an existing FHA mortgage, the six-payment clock starts from the assumption.

Cash-out refinances also require at least six months of payments on the existing mortgage, and the simple refinance follows similar seasoning rules. Late payments during the seasoning window can disqualify you outright, so staying current matters for the refinance eligibility itself, not just the credit pull.

Picking the Program

The right ceiling depends on what you’re after. Need cash? The 80 percent cap defines your maximum, and the MIP structure quietly works in your favor. Want a lower rate on an existing FHA loan and have little or no equity? The streamline skips the appraisal and the LTV test, provided you clear the 5 percent payment-reduction benchmark. Moving from a conventional loan into FHA, or need an appraisal for other reasons? The simple refinance stretches to 97.75 percent but will put you in lifetime MIP unless you can get down to 90 percent or below. Before running any of the math, confirm the FHA loan limit for your county, because that number can be the real constraint and it rarely gets mentioned until underwriting.

1
U.S. Department of Housing and Urban Development. Mortgagee Letter 2019-11 – Maximum LTV for Cash-Out Refinances
2
U.S. Department of Housing and Urban Development. HUD 4155.1 Chapter 3, Section B – Maximum Mortgage Amounts on No Cash Out/Cash Out Refinance Transactions
3
Federal Deposit Insurance Corporation. Affordable Mortgage Lending Guide – Streamline Refinance
4
U.S. Department of Housing and Urban Development. Streamline Refinance Your Mortgage
5
U.S. Department of Housing and Urban Development. FHA Single Family Housing Policy Handbook 4000.1 – Net Tangible Benefit of Streamline Refinances
6
U.S. Department of Housing and Urban Development. Appendix 1.0 – Mortgage Insurance Premiums
7
U.S. Department of Housing and Urban Development. FHA Mortgage Insurance Premium Structure for Forward Mortgage Loans
8
U.S. Department of Housing and Urban Development. HUD Federal Housing Administration Announces 2026 Loan Limits