FHA Cash Out Refinance: Maximum LTV Explained When it comes to cashing out on your home equity, understanding the maximum loan-to-value (LTV) ratio is crucial. For those considering an FHA Cash Out Refinance, this article will provide valuable insights. The Federal Housing Administration (FHA) offers cash out refinancing options to homeowners who are looking to tap into their home's equity. However, there are certain limitations on how much you can borrow based on the maximum LTV ratio. LTV ratio represents the loan amount divided by the appraised value of your property. For an FHA Cash Out Refinance, the maximum LTV ratio is typically 85%. This means you can borrow up to 85% of your home's appraised value through the cash-out refinance. To calculate your maximum LTV, you'll need to know the current appraised value of your property. For example, if your home is appraised at $200,000, the maximum loan amount you can borrow would be $170,000 (85% of $200,000). It's important to note that the maximum LTV ratio may vary depending on certain factors, such as the type of property you own or the purpose of the cash-out refinance.