Does FHA allow cash out refinances?

Yes, FHA allows cash out refinancing.

A Cash-Out Refinance is a refinance of any mortgage or a withdrawal of equity where no mortgage currently exists, in which the mortgage proceeds are not limited to specific purposes.

For additional information see:

Handbook 4000.1 II.A.8.d.i.(B)(1); II.A.8.d.ii.(B)-(C); II.A.8.d.v available at

Mortgagee Letter 2019-11 available at:

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-03967