How much the caps let you take
A cash-out refinance replaces your mortgage with a bigger one and hands you the difference. The limit is set as a share of the appraised value, and it depends on the loan type.
| Loan type | Max loan-to-value | Seasoning | Notes |
|---|---|---|---|
| Conventional, 1-unit primary | 80% | 12 months ownership, some exceptions | 2–4 units cap lower, ask the lender |
| FHA | 80% | 12 months ownership and occupancy | 1.75% upfront MIP applies |
| VA | Up to 100% by VA rule, many lenders cap at 90% | Existing home loan, VA eligibility | Funding fee 2.15% first use, 3.3% after |
Take a South Philly rowhome that appraises at $400,000 with a $220,000 balance. At 80%, the new loan tops out at $320,000. Pay off the old loan and you’re left with about $100,000 before closing costs, as an estimate. The appraiser decides the $400,000, and on a 1920s house that means the same eye for peeling paint and loose railings as a purchase appraisal. The rowhome appraisal guide tells you what to fix first.
No transfer tax, so the math is cleaner
A sale in Philadelphia pays 4.578% in transfer tax. A refinance pays none, because Pennsylvania only taxes documents that convey title, and a mortgage isn’t one. There’s no mortgage tax in the state either. What you do pay is the county recording fee, the lender’s fees, and a title policy at the filed non-sale rate, which on a $300,000 loan comes to about $1,867 before any reissue discount.
That matters because the cash-out alternative for a lot of Philly families used to be selling and moving. Selling a $400,000 house costs $18,312 in transfer tax alone, split by custom with the buyer. Borrowing against it costs a title policy and the lender’s fees. The refinance page has the full cost table.
Using the cash for a Philly rehab
The most common reason people here take cash out is the house itself. A new roof, a kitchen that predates the Vet, a bathroom on the second floor so nobody walks down the rowhome stairs at 3 a.m. Philadelphia rewards that spending in a way the suburbs don’t.
Residential rehab in the city qualifies for a 10-year abatement under Ordinance 961, which is still 100% of the improvement value for the full ten years. That’s the older, better version of the abatement. New construction permitted after January 1, 2022 gets the phase-down instead, 100% in year one falling 10 points a year. The application has to go in within 60 days of the building permit, which means you pull the permit. Unpermitted work gets no abatement and can complicate the next appraisal. Details are on the abatement guide.
At the city’s 1.3998% rate, abating $60,000 of improvement value saves about $840 a year, or roughly $8,400 over the decade, as an estimate. That doesn’t pay for the kitchen, but it’s a real offset to the interest on it.
Cash-out or a HELOC
A HELOC is a second lien that sits behind your current mortgage. If your first mortgage carries a rate you’d rather not touch, a HELOC lets you keep it and borrow only what you draw. The tradeoff is a variable rate on the line and two payments.
A cash-out gives you one fixed payment on the whole balance, at whatever the market offers now. Which one wins depends on your current rate, how much you need, and how fast you’ll spend it. A contractor who pays in stages fits a HELOC. A lump sum to pay off a relative’s share of an inherited house fits a cash-out. We don’t price either, but the lender who calls you back will run both.
Seasoning, the deed, and the assessment
Three things stop a Philly cash-out cold. The first is time: conventional generally wants 12 months of ownership, and FHA wants 12 months of owning and living there. The second is the appraisal coming in under your expectation. The 2027 assessments the city mailed on June 29, 2026 moved the median home up 3% from 2025, with much larger jumps in Kensington and parts of North Philly, but an assessment isn’t an appraisal and the lender only uses the appraisal.
The third is the deed. Around 10,000 Philadelphia homes are still titled to someone who has died, and no lender can write a cash-out to a person who isn’t the record owner. If you inherited the house and never probated it, start with the tangled title guide. The Tangled Title Fund pays up to $6,500 toward clearing it for eligible households, plus up to $3,500 more for transfer taxes.
If the house checks all three, the process looks like a purchase without the moving truck: application, appraisal, underwriting, closing at a title company. There’s no attorney requirement in Pennsylvania. Run the new payment through the mortgage calculator before you decide how much to take.
Start with one call
Tell us roughly what the house is worth, what you owe, and what the money is for. The lender who calls you back does cash-out on rowhomes, twins, and suburban colonials, and you’ll hear the cap and the estimated net in one call. Call us.