Last updated August 1, 2026 by Tim Stacey, Stacey Solutions powered by Xpert Home Lending, Inc NMLS 2179191.
Quick answer
An FHA cash out refinance replaces your current mortgage with a larger FHA loan and gives you the difference in cash. In 2026 you can borrow up to 80 percent of your home’s value. You need to have owned and occupied the home for at least 12 months, with on time payments, and FHA’s flexible credit standards make this option reachable for Solano County homeowners who might not qualify for a conventional cash out. The tradeoff is mortgage insurance, which is why the right choice depends on your full picture.
How an FHA Cash Out Refinance Works
Home values across Vacaville, Fairfield, and Solano County have built real equity for homeowners over the past several years. An FHA cash out refinance turns part of that equity into usable money. You take out a new, larger FHA loan. It pays off your existing mortgage, whatever type it is, and the difference lands in your account after closing.
Notice something important there. Your current loan does not need to be FHA. Homeowners with conventional loans sometimes choose an FHA cash out because FHA’s credit standards are more forgiving. If life dinged your credit since you bought, FHA may say yes where conventional lenders hesitate.
2026 FHA Cash Out Requirements
The property must be your primary residence and you must have owned and lived in it for at least the past 12 months. Your mortgage payments over that period need to be on time. The maximum loan to value is 80 percent, meaning your new loan can be up to 80 percent of the appraised value. Unlike the streamline, a full appraisal is required, along with income and employment documentation.
FHA loan limits apply and they vary by county. With the 2026 conforming baseline at $832,750, most Solano County scenarios have plenty of room. If your numbers are larger, we simply look at conventional or jumbo options instead.
What the Money Is Good For
The strongest uses put the money back to work. Home improvements that raise your property value. Consolidating high interest credit card debt into one manageable payment at a fraction of the rate. Funding a business, education, or an investment opportunity. Used this way, a cash out refinance is a wealth building tool, which is the whole point of homeownership in my book.
Used carelessly, it can trade long term equity for short term spending. I will always give you a straight answer about whether the math serves your goals. If the honest answer is that you should not do it, I will tell you that too.
FHA vs Conventional Cash Out: The Real Comparison
Both programs cap at 80 percent loan to value in 2026, so the deciding factors are credit and mortgage insurance. FHA is more flexible on credit scores and debt ratios. Conventional requires stronger credit but carries no mortgage insurance at 80 percent or below, while FHA adds both an upfront premium of 1.75 percent and an annual premium around 0.55 percent.
Here is my rule of thumb for Solano County homeowners. If your credit is strong, the conventional cash out refinance usually wins because you skip mortgage insurance entirely. If your credit took some hits, FHA often delivers a better rate than a low credit conventional loan even after insurance. And if you are a veteran, the VA cash out option in my VA loan guide may beat them both. As a wholesale broker I price all three across a large network of lenders led by UWM and show you the side by side in a discussion document.
Frequently Asked Questions
How much cash can I get with an FHA cash out refinance?
Up to 80 percent of your appraised value minus what you owe. On a $600,000 Vacaville home with a $350,000 balance, that is up to $130,000 before closing investment.
What credit score do I need?
FHA’s floor is lower than most people expect and lenders set their own overlays. Because I work with many lenders, a score that gets declined at one bank often gets approved through another. Bring me your real situation and I will give you a real answer.
Does my current loan have to be an FHA loan?
No. You can use an FHA cash out refinance to replace a conventional or other loan type, as long as the new FHA loan meets program rules.
How long do I have to own my home first?
You must have owned and occupied the home as your primary residence for at least 12 months, with on time mortgage payments during that period.
Is the cash from a refinance taxable?
Loan proceeds are borrowed money, not income, so they are generally not taxable. For how interest deductions apply to your situation, your tax professional is the right resource and I am glad to coordinate with them.
Find Out What Your Equity Can Do
If you own a home in Solano County and want to know what your equity could accomplish, I will run your numbers across FHA, conventional, and VA options and show you the most competitive structure for your scenario. Reach out here or call or text (707) 317-1364.