The Quick Read: A conventional cash-out refinance has to clear two separate ceilings: a county dollar cap on the loan, and a leverage cap based on your home’s appraised value. A high-cost county raises the first ceiling. It does nothing to the second. On a one-unit primary residence, leverage tops out at 80% of value, so equity is usually what limits your cash. The dollar cap only takes over on higher-value homes.
Key Takeaways
- The county limit caps the new loan amount. It does not cap your home’s price or value.
- A high-cost county does not lift the 80% leverage cap on a one-unit primary residence.
- At 80% leverage, the dollar cap binds once your home is worth more than 125% of the county limit.
- Two clocks apply: six months on title, and a first mortgage at least 12 months old.
- Two- to four-unit homes, second homes and rentals get a lower 75% cap.
- Check your own county’s current limit. It resets every year and differs county to county. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
What Makes a County “High-Cost”?
A county is high-cost when local home values run well above the national baseline. The agency that sets loan limits compares 115% of the county’s median home value to the baseline. If that number is higher, the county gets a higher limit. The limit can never rise more than 50% above the baseline.
That produces a range, not one number. Some counties sit at the baseline. Some land in the middle. Only the most expensive reach the ceiling. A neighboring county can carry a different limit, because each county is measured on its own.
Two- to four-unit homes get their own higher limits, calculated with multipliers on the same local figure. High-cost values are rounded down to the nearest $25, per the FHFA conforming loan limit addendum.
Loans above the baseline but within the local cap are often called “high-balance” loans. They are still conforming, but they follow a few extra rules, covered below. Loans above the local cap are jumbo. That is a separate lane with its own credit and leverage rules.
The Two Ceilings on Every Cash-Out Loan
Your maximum loan is the lower of two numbers. Think of it as a test with two gates.
Gate one is the county limit. The new loan amount must fit under it. That amount includes your payoff, any financed closing costs and the cash you take out.
Gate two is leverage. Across the wholesale programs I arrange files through, conventional cash-out is capped at 80% of appraised value on a one-unit primary residence. It is 75% on two- to four-unit primary residences, second homes and investment property. These match the Fannie Mae Eligibility Matrix.
Many homeowners assume a high-cost county means a bigger share of equity is available. It does not. The county only raises the dollar ceiling. Manufactured homes carry a still lower cap, and you should confirm it against the current Matrix.
Lendmire’s cash-out refinance programs sit inside these same two gates. The brokerage arranges them through wholesale lenders. It does not lend.
Which Limit Binds First?
At 80% leverage, the crossover is simple math. Divide the county limit by 0.80. That gives the home value where both gates close at the same moment. In plain terms, 80% of a home worth 125% of the county limit equals the limit exactly. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
| Your home’s value vs. county limit | Which ceiling controls |
|---|---|
| Below 125% of the limit | Leverage (80%) controls |
| Right at 125% of the limit | Both ceilings meet |
| Above 125% of the limit | County dollar cap controls |
For two- to four-unit homes and second homes at 75%, the crossover moves. The dollar cap binds once value passes roughly 133% of the limit.
When leverage controls, a higher appraisal means more cash. When the dollar cap controls, a higher appraisal does nothing for you. Past that point, extra equity sits idle in a conforming loan.
A Worked Example (Modeled, No Dollars)
Here is a one-unit primary residence run two ways. The inputs are assumptions I picked to show the mechanics. They are not market data. Every figure is a share of appraised value.
Assume the existing first mortgage balance is 50% of value. Financed closing costs come off the top in both cases.
| Step | Scenario A | Scenario B |
|---|---|---|
| County limit as % of value | 90% | 70% |
| Leverage ceiling | 80% | 80% |
| Controlling ceiling | 80% (leverage) | 70% (dollar cap) |
| Less existing payoff | 50% | 50% |
| Cash before financed costs | 30% | 20% |
Same house, same payoff, different county limit. In Scenario A, equity decides the outcome. In Scenario B, the county cap cuts your cash by a third. Financed closing costs then reduce either result further, because they count against the same ceiling.
In practice the appraisal is where many of these files are decided. A low value shrinks the leverage number. A high value only helps until the dollar cap takes over.
What Counts Toward the County Limit
The limit tests the total new loan. That includes:
- The payoff of your existing first mortgage.
- Any other liens you pay off at closing.
- Closing costs and prepaid items you choose to finance. The Fannie Mae Selling Guide governs which costs and payoffs qualify on a cash-out.
- The cash you take out.
Financing costs feels painless, but it is not free. Each financed dollar eats into your cash-out room and raises your balance. When the dollar cap is already your limit, those costs come straight out of your proceeds.
The Rules Underneath Both Gates
Passing the math is not enough. The file also has to pass seasoning and underwriting tests. These are agency rules, and the lender applies them to every conventional cash-out.
Seasoning has two clocks. The existing first mortgage must be at least 12 months old, measured note date to note date. At least one borrower must have been on title for six months. Both tests come from the Selling Guide. Exceptions exist for inherited property, legal awards and delayed financing, covered below.
Credit and ratios. The wholesale conventional programs start at a 620 decision score. The automated underwriting finding governs most files, with a total debt-to-income ratio ceiling of 50%. Manually underwritten loans run tighter, at 36% or 45%.
Reserves. On an automated cash-out with debt-to-income above 45%, the Selling Guide requires six months of reserves. Reserves are cash or liquid assets left over after closing. High-balance loans must be run through the automated system. Manual underwriting is not an option for them, per the Selling Guide-incorporated Matrix.
One special lane. A wholesale option reaches 89.99% leverage with no mortgage insurance. It requires a 680 score, a 50% ratio ceiling, a thirty-year fixed rate, a primary residence and a conforming balance. It carries its own six months of seasoning. It is not written in Texas. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Where the General Rule Breaks
The rules above hold for most files. A few situations bend them. These are the ones that catch people off guard.
High-balance loans. Many borrowers assume a loan “within the county limit” is treated like any other conforming loan. It is not quite. High-balance loans must go through automated underwriting. They are also excluded from the highest-leverage tier on limited cash-out refinances. Price adjustments can layer on top, and I would not assume a high-balance loan prices like a baseline loan. Ask for it to be explained on the Loan Estimate.
Delayed financing. Say you bought a home with cash and want your money back soon. A delayed financing exception waives the six-month title wait. It is still a cash-out loan. The 80% cap and cash-out pricing still apply. The original purchase has to be documented as a cash deal with no mortgage financing.
Inherited property, trusts and legal awards. The six-month title rule has named exceptions here. Time in a revocable trust can count when you are the primary beneficiary.
Free-and-clear homes. A new loan on a home with no mortgage is cash-out, not rate-and-term. The 80% cap applies from the first dollar.
Existing-loan age exceptions. The 12-month test does not apply to subordinate liens being paid off, or to a co-owner buyout.
Ineligible features. A cash-out loan cannot carry a temporary interest rate buydown. Community Seconds are not permitted with cash-out. Certain solar-style property-assessment liens (PACE) can also block eligibility if you choose not to pay them off.
Texas. A cash-out on a Texas homestead is capped by the state constitution at the agency figure. The 89.99% wholesale lane is not written there.
Occupancy. Primary-residence caps run higher than second-home, rental and two- to four-unit caps. Occupancy decides the leverage.
What If Your Numbers Exceed the Cap?
If the dollar cap controls, you have four realistic options.
1. Take less cash. Shrink the cash-out so the new loan fits under the cap. This is the simplest fix.
2. Skip the cash-out refinance. A home equity loan or line of credit leaves your first mortgage intact. That helps if you like the loan you already have. Compare total costs rather than assuming either path is cheaper.
3. Go jumbo. Loans above the cap move to jumbo programs. Pricing and available terms vary by lender, borrower profile, property type, and full underwriting review. The ratio ceiling is 50% on the fixed lanes. This is a different product with its own review. It is not a stretched version of conforming.
4. Wait for the next limit reset. Limits are updated every year, and a county’s cap sometimes rises. Don’t plan around a number you have not seen published.
How to Find Your County’s Current Limit
Use the FHFA conforming loan limit lookup. Pick your county and your unit count. Do not rely on a figure you saw in an article, including this one. Limits reset each year, and the number that applies depends on when your loan is set up.
Search results sometimes surface figures for years that have not been announced. Treat those with suspicion. Go to the agency page.
Remember too that the limit applies to your original loan balance, not your home’s purchase price or today’s value.
How It Compares With Other Refinances
| Refinance type | Cash back | Leverage on one-unit primary |
|---|---|---|
| Conventional cash-out | Meaningful cash | 80% |
| Rate-and-term (limited cash-out) | Incidental only | 95% |
| FHA Streamline | None meaningful | No appraisal on existing FHA |
| VA IRRRL | None meaningful | No VA appraisal on existing VA |
Rate-and-term pays off the first mortgage, closing costs and a purchase-money second lien. It allows only incidental cash back. If you do not need cash, it reaches more of your home’s value. Mortgage insurance applies above 80%. It can be cancelled on request at 80% of original value and ends automatically at 78%.
Moving from rate-and-term to cash-out costs you 15 points of leverage. That is the real price of taking cash.
Is Cash-Out Right for You? A Short Checklist
- Have you owned the home six months, and is your existing first mortgage 12 months old?
- Is your county limit above 80% of your home’s value, or below it?
- Does your credit score clear 620, and does your total debt ratio fit under 50%?
- Have you counted the whole balance? The new loan replaces your old one and re-sets its terms.
- Is your goal worth the trade? Paying unsecured debt with mortgage debt puts your home behind it. 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
Conforming loan limit: the maximum loan amount the agencies will buy, set by county each year. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
High-balance loan: a conforming loan above the national baseline but within a high-cost county’s limit.
Loan-to-value (LTV): your loan amount divided by your home’s appraised value.
Seasoning: the waiting period an agency requires before you can cash out, counted from the loan date or title date.
Reserves: liquid assets you hold after closing, measured in months of payments.
Delayed financing: a cash-out exception for homes bought with cash, which waives the six-month title wait.
Your Next Step
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches. Every program figure here is subject to lender guidelines and full file review. Nothing here is a commitment to lend.
Frequently Asked Questions
Does a high-cost county let me borrow more against my home’s value?
No. It raises the dollar ceiling on the loan, not the leverage cap. A one-unit primary residence still tops out at 80% of appraised value on a conventional cash-out. The county limit only matters when 80% of your home’s value would exceed it.
How do I know whether the dollar cap or the 80% cap controls my loan?
Divide your county limit by 0.80. If your home is worth more than that result, the dollar cap controls. If it is worth less, leverage controls. For two- to four-unit homes and second homes, divide by 0.75 instead.
Can I cash out a loan that is already high-balance?
Often yes, if the new loan stays within the county limit and passes the other tests. It must go through automated underwriting. The existing loan also needs to be at least 12 months old, and price adjustments can differ from a baseline loan.
What if I bought the home with cash recently?
Delayed financing may waive the six-month title wait. The loan is still treated as cash-out, so the 80% cap and cash-out pricing apply. Expect to document the original purchase as a cash deal with no mortgage.
Which year’s limit applies to my loan?
The limit in effect for your loan, which resets each year. Check the agency lookup for your county rather than relying on a figure from an article. If your loan is near the cap, ask your broker which limit year applies before you pay for an appraisal.
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.
For the program’s current guidelines, see conventional loan programs.
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References
1. FHFA Conforming Loan Limit Addendum
2. Fannie Mae Eligibility Matrix
3. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
4. Fannie Mae Eligibility Matrix (Selling Guide-incorporated copy)
5. FHFA Conforming Loan Limit Lookup
This article is part of Lendmire’s Conventional Loans series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Can a Homeowner Take Cash Out With a Conventional Refinance? · Can a Homeowner Do a Conventional Cash-Out Refinance in Six Months? · Conventional Cash-Out Refinance Limits for a Large Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.