The Quick Read: Not always on the published minimum, but almost always on the overall bar. The wholesale conventional programs start at a 620 decision score for purchase and cash-out alike. A cash-out refinance, though, carries lower leverage caps, seasoning rules and extra pricing adjustments, so a weak score leaves less room to maneuver than it does on a purchase. Approval and cost are separate questions, and score drives both.
Short Answer: Cash-Out vs. Purchase vs. Rate-and-Term
The minimum score is usually the same across the three loan purposes. What changes is how much else the file has to carry. Across the wholesale programs Lendmire places files with, the conventional lanes start at a 620 decision score, and 640 on an adjustable rate under manual underwriting. Most files are decided by the automated finding, not by a fixed score cutoff.
Fannie Mae has also changed the picture. Its Selling Guide announcement removed the 620 minimum for Desktop Underwriter casefiles created on or after Nov. 16, 2025. The system now weighs the full risk picture. That applies to purchase and cash-out alike, and the agency said the change did not relax existing standards. Lender overlays, which are a lender’s own stricter rules, still apply. That is where a “minimum score” often shows up again in practice.
Three points to carry forward:
- The score floor is mostly the same. The leverage allowed is not.
- Cash-out borrowers hit seasoning rules that purchase borrowers never see.
- Score moves cost as well as eligibility, through pricing adjustments.
Why Lenders Treat Cash-Out Differently
Cash-out is underwritten as a higher-risk transaction because the borrower pulls equity out of the home. A purchase starts with a down payment. A cash-out refinance does the opposite: it converts ownership into new debt. The lender has less cushion if values slip or payments stall.
The numbers show up in the leverage caps. On a purchase, one-unit principal residences reach 95% LTV, or 97% with a first-time-buyer program. A conventional cash-out on a one-unit principal residence tops out at 80% LTV. Two- to four-unit principal residences, second homes and investment properties cap at 75% on cash-out. All of these are subject to lender guidelines and full file review.
Data supports the risk logic. The CFPB found that cash-out borrowers tend to have lower credit scores, lower incomes and smaller loan amounts than borrowers who do not take cash out. So lower scores do get approved. The score is just not the only gate.
How the Three Loan Purposes Compare
| Factor | Purchase | Rate-and-Term | Cash-Out |
|---|---|---|---|
| Typical score floor | 620 decision score | 620 decision score | 620 decision score |
| Max LTV, 1-unit primary | 95% (97% first-time buyer) | 95% (97% in some cases) | 80% |
| Seasoning | None | Lighter | 12 months on loan, 6 on title |
| Mortgage insurance | Above 80% LTV | Above 80% LTV | Not needed at 80% |
| Pricing sensitivity | Moderate | Moderate | Higher |
The table shows why the question is slightly off. The score line looks identical, but the cash-out column is stricter everywhere else. A borrower at the 620 line with thin equity usually fits a refinance or a purchase better than a cash-out.
How Score Trades Off Against LTV, Ratios and Reserves
Score, leverage and debt-to-income ratio are levers on one file. A strong score can offset a higher ratio. Low leverage can offset a borderline score. The automated finding weighs all of them together.
On the wholesale programs, the total ratio ceiling is 50% on files that get an automated approval. Manually underwritten loans are held to 36% or 45%, with reserve and score factors from the Eligibility Matrix. Reserves can also be required: Fannie Mae’s eligibility matrix notes call for minimum reserves on Desktop Underwriter cash-out files with a DTI above 45%.
One wholesale lane reaches 89.99% LTV with no mortgage insurance. It requires a 680 score and a 50% ratio on a thirty-year fixed rate, a primary residence and a conforming balance, plus its own six months of seasoning. That is the clearest example of score buying leverage. Texas homestead cash-outs are capped by the state constitution, so that lane is not written there. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Approval Floor vs. Best-Pricing Tier
Meeting the minimum score gets a file reviewed. It does not get the best terms. Freddie Mac applies a credit fee to cash-out loans that varies by credit score and LTV, per Exhibit 19 of its Guide. In plain terms, a higher score and lower LTV generally mean lower cash-out fees.
This is where the “same minimum” answer misleads. A borrower at 620 and a borrower at 740 can both be approved on the same cash-out. They will not see the same pricing. A few points of score can change closing costs, not only eligibility. Both borrowers see the actual figures on their Loan Estimate and Closing Disclosure.
The Seasoning Rules Purchase Buyers Never Face
Seasoning is the quiet cash-out hurdle. Under the Fannie Mae cash-out guide, the first mortgage being paid off must be at least 12 months old, measured note date to note date. At least one borrower must also have been on title for six months. Freddie Mac applies a similar six-month title rule, and on a primary residence all borrowers must occupy the property.
Exceptions exist. Delayed financing covers someone who bought recently and wants to pull cash out. Inheritance and legal-award situations also have carve-outs. Files that assume seasoning away are the ones that get sent back.
A rate-and-term refinance avoids the 12-month rule. It pays off the existing first mortgage, closing costs and any purchase-money second lien, with only incidental cash back. It also reaches 95% LTV on a one-unit primary residence. For a lower-equity borrower, that is often the better fit.
FHA and VA: Different Rules, Same Idea
FHA and VA do not run on a single conventional-style score table. FHA cash-out is capped at 80% LTV under HUD’s handbook. It also has a payment-history trigger: a recent mortgage delinquency, or too few payments since a forbearance plan, can send the file to manual underwriting. The text is in HUD Handbook 4000.1, which should be checked at hud.gov before relying on any detail. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
VA sets no minimum score for cash-out, so lenders set their own. That is the overlay point again. Different lenders land on different floors for the same borrower.
The streamlines are the opposite case. HUD describes the FHA Streamline as a refinance of an existing FHA mortgage with limited credit documentation and underwriting. The VA IRRRL requires no appraisal or credit underwriting package, though lenders can add their own requirements. A borrower who wants lower payments rather than cash can skip the credit hurdle cash-out brings. Both are same-program only: FHA to FHA, VA to VA. The IRRRL carries a 0.5% funding fee unless the borrower is exempt, a net tangible benefit test, and seasoning of the later of 210 days and six payments.
Three Illustrative Borrower Profiles
These are hypotheticals, with no pricing.
Borderline score, plenty of equity. A homeowner sits near the 620 line with roughly 40% equity. A cash-out at or under the 80% LTV cap is workable on paper. The score will raise the pricing adjustment, and the automated finding will decide. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Strong score, thin equity. A borrower with a high score has about 10% equity. Score does not fix the math. At an 80% cap, there is no cash-out room. A rate-and-term at up to 95% LTV may be the only move.
Mid score, recent purchase. A borrower closed on the home eight months ago and wants cash out. The 12-month seasoning clock on the existing loan blocks it unless delayed financing applies. Waiting or restructuring beats forcing the file.
Which Score Lenders Pull
Lenders request credit scores for every borrower. With co-borrowers, the file is generally reviewed on the lower middle score, not an average of the best numbers. Mortgage scoring models also differ from the consumer scores in free apps, so the number a borrower sees online can differ from the one the lender uses. Expect the difference, and do not treat the app number as a promise.
Credit events carry waiting periods set by the agencies: four years from a chapter 7 discharge, seven from a foreclosure, and four from a short sale or deed-in-lieu. Shorter periods can apply with documented extenuating circumstances.
If Your Score Is Borderline
Compensating factors do the work here. Lower leverage, reserves, a lower debt ratio and clean recent payment history can all strengthen a file, subject to lender guidelines. Paying down revolving balances before the credit pull is the most common fix. Do not open new credit during the process.
A practical order of operations:
1. Pull your credit reports and correct any errors.
2. Pay revolving balances down before the application, not after.
3. Confirm your seasoning dates: loan note date, title date and occupancy.
4. Compare cash-out against rate-and-term and a streamline, if you hold an FHA or VA loan.
5. Review the Loan Estimate and Closing Disclosure side by side.
Does a Cash-Out Refinance Affect Your Credit?
It can, in both directions. The CFPB reported that cash-out borrowers’ scores improved sharply at first, then gradually worsened, though they stayed above pre-refinance levels. More than half of borrowers in the study period said they used the cash to pay off other bills or debts.
That carries a trade-off. Converting card or loan balances into mortgage debt can put the home at risk if payments become unsustainable. Cash-out also replaces the first mortgage. A home equity loan or HELOC leaves it in place. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Key Terms Defined
Decision score: The credit score a lender uses to review the file, generally the lower middle score when there are co-borrowers.
LTV (loan-to-value): The new loan balance as a percentage of the home’s appraised value.
Seasoning: The minimum time a loan, title or occupancy must exist before a transaction is allowed.
Overlay: A lender’s own rule that is stricter than the agency minimum.
Limited cash-out (rate-and-term): A refinance that pays off the existing first mortgage and costs with only incidental cash back.
Frequently Asked Questions
Is the minimum score for a cash-out refinance higher than for a purchase?
Usually not. The wholesale conventional programs start at a 620 decision score for both. Cash-out is harder to clear because of the 80% LTV cap on a one-unit primary residence, the seasoning rules and the added pricing adjustments.
Can I get a cash-out refinance with a score near 620?
Possibly, depending on equity, ratios and the automated finding. Lower leverage and reserves help. Pricing adjustments rise as score falls, so expect higher costs even if the file is approved. Everything is subject to lender guidelines and full file review.
Did Fannie Mae remove the 620 minimum?
For Desktop Underwriter casefiles created on or after Nov. 16, 2025, yes. The system now weighs a broader risk analysis. Lenders still request scores, and many keep their own floors, so the practical minimum can still be 620.
Do FHA and VA cash-outs require the same score as conventional?
No. FHA works through handbook rules, including an 80% LTV cap and a payment-history trigger. VA sets no minimum, so lenders set their own. A VA or FHA owner who only wants a lower payment may qualify for a streamline with lighter credit review. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
How soon after buying can I do a cash-out refinance?
The existing first mortgage generally must be at least 12 months old, and one borrower needs six months on title. Delayed financing is an exception for recent purchases. A rate-and-term refinance does not carry the 12-month rule.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae SEL-2025-09 Selling Guide Announcement
2. CFPB, A Look at Cash-Out Refinance Mortgages and Their Borrowers
3. Fannie Mae (document 20786)
4. Freddie Mac Exhibit 19, Credit Fees
5. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
6. Freddie Mac Guide Section 4301.5
7. HUD Streamline Refinance page
8. CFPB newsroom: cash-out borrowers’ credit scores
9. CFPB: CFPB Cash Out Refinances and Paydown Behavior of Non Mortgage Debt Balances
This article is part of Lendmire’s Refinance series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: FHA Cash-Out Credit Requirements and When a File Goes Manual · FHA Cash-out Refinance Credit Requirements: The Floor And The Overlays Above It · How to Shop VA Cash-Out Lenders by Credit Floor and LTV Overlay
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.