It used to be that qualifies borrowers could refinance into an FHA loan and get cash out up to 95% of the appraised value of the home. Those days are soon to be gone. HUD just announced that beginning April 1 cash out refinances through the FHA have an 85% loan to value maximum.
FHA had already been moving in this direction. Recently they started requiring a second appraisal for cash out refinances between 85% and 95% of the appraised value of the home. The latest change is almost certainly a way to protect the FHA funds from drying up in this environment where home values across the US are predicted to drop another 20-30% in 2009.