The Quick Read: Yes. Condos are an eligible property type for conventional cash-out, and a one-unit principal residence is generally limited to 80% of its value. The difference from a house is that the condo project has to pass review along with you and your unit. Everything here is subject to lender guidelines and full file review, and nothing is a commitment to lend.
What Does Cash-Out Mean on a Condo?
A cash-out refinance replaces your current first mortgage with one new, larger loan, and you keep the difference as cash. A rate-and-term refinance only pays off the old loan and closing costs, with incidental cash back.
The line between the two matters because cash-out is the more tightly limited transaction. Across the wholesale programs Lendmire works with, a one-unit principal residence tops out at 80% loan-to-value on cash-out. By comparison, a rate-and-term refinance of the same home can reach 95%. The extra cash you take out is the reason for the lower ceiling.
Cash-out loans also carry risk-based pricing add-ons that Fannie Mae publishes by credit score and leverage in its LLPA Matrix. Those add-ons are part of why a cash-out costs more than a limited refinance. Your Loan Estimate shows what applies to your file.
Lendmire is a mortgage broker. It arranges conventional loans through wholesale lenders and does not lend directly. For a look at the program itself, see Lendmire’s cash-out refinance programs.
Two Things Must Qualify: You and Your Building
A house refinance reviews the borrower and the property. A condo refinance adds a third layer, the association. A strong borrower can still be stopped by a weak building.
| Factor | Borrower and unit | Condo project |
|---|---|---|
| What gets reviewed | Credit, ratios, income, assets | Association finances, insurance, litigation, repairs |
| Who supplies it | You and your lender | Your HOA or management company |
| Appraisal | Unit value | Comparable sales, project condition |
| Can it stop the loan? | Yes | Yes, even if you qualify |
On the borrower side, the wholesale conventional programs generally start at a 620 decision score. The automated finding governs most files, with a total debt-to-income ceiling of 50%. Manually underwritten loans run tighter, at 36% or 45%, depending on reserves and score. Your HOA dues count in your monthly obligations alongside the mortgage.
How Much Can You Borrow Against a Condo?
Fannie Mae’s Eligibility Matrix sets the maximum for a one-unit principal-residence cash-out at 80%. Two- to four-unit principal residences, second homes and investment property are held to 75%. The same matrix notes that lower limits may apply to condos depending on the type of loan. So 80% is the ceiling, not a promise. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Occupancy decides leverage here. If the condo is a second home or a rental rather than your residence, you move to the lower tier, and this article does not cover that lane.
One wholesale lane goes further. It reaches 89.99% loan-to-value with no mortgage insurance, at a 680 score and a 50% ratio on a thirty-year fixed. It requires a primary residence and a conforming balance, and it has its own six months of seasoning. Whether a condo fits that lane depends on the lender and the project. In Texas, a cash-out on the homestead is capped by the state constitution at the agency figure, and that lane is not written there.
Here is how the math looks in words. Take your appraised value, apply 80%, and subtract your existing payoff and closing costs. What remains is your cash. A lower appraisal shrinks it directly. Keep in mind that lenders also want you to retain an equity cushion, and the CFPB’s home equity guide says no option converts all your equity to cash.
What Makes a Condo Building Eligible?
The project review looks at the association’s money, insurance, legal exposure and physical condition. This is what most often separates a condo refinance from a house refinance.
The reviewer is typically looking at:
- Budget and reserves. Whether the association sets aside enough for replacements. Reported rule changes would raise the minimum reserve allocation over time, so ask your lender what applies to your application date.
- Delinquent dues. A high share of owners behind on assessments is a warning sign.
- Insurance. The master policy must meet Fannie Mae’s insurance requirements.
- Litigation. Pending lawsuits against the association can make a project ineligible.
- Critical repairs. Unaddressed critical repairs or evacuation orders can stop a loan. Freddie Mac’s condominium unit mortgage FAQ describes this check for projects of five or more attached units.
- Project type. Condo hotels, timeshares and segmented-ownership projects are ineligible. A project flagged “Unavailable” in Fannie Mae’s Condo Project Manager is also barred.
Review pathways have been shifting. Confirm the current rules with your lender, since the guide changes.
Do Waivers Help a Cash-Out?
Mostly no. Fannie Mae’s waiver of project review covers detached condos and certain small projects. It also covers a Fannie Mae-to-Fannie Mae limited cash-out refinance at a maximum 80% loan-to-value. That last waiver is for limited cash-out, not true cash-out. A full cash-out generally cannot use it. Freddie Mac’s exemption for refinances likewise covers “no cash-out” loans, not true cash-out.
Detached and site condos are the genuine exception. If your unit shares no walls, ceilings, floors or attached elements such as breezeways or garages, project review is waived. Small projects of two to four units are also commonly waived or exempt.
Timing Rules: The Two Clocks
Seasoning trips up more cash-out applicants than leverage does. Under Fannie Mae’s cash-out refinance rules, two separate clocks run:
| Clock | Requirement |
|---|---|
| Time on title | At least one borrower on title for 6 months |
| Age of existing first mortgage | At least 12 months, note date to note date |
Exceptions exist for inheritance, a legal award such as a divorce settlement, and delayed financing for cash buyers. Waiting out one clock does not satisfy the other.
The HOA Questionnaire and Documents
Your lender will request items from the association, and the association controls the pace. In practice, the HOA’s turnaround is often the least predictable part of a condo file, so ask for these items early:
1. The condo questionnaire, completed by the management company
2. The current annual budget
3. The master insurance certificate
4. Reserve information, such as a reserve study
5. Notice of any pending litigation or special assessments
You supply the usual consumer items: a payoff statement, your homeowners insurance, and income and asset documents. A pending special assessment can hurt twice. It raises your obligations, and it can raise questions about the project’s finances.
The Appraisal on a Condo
Condo appraisals use the Individual Condominium Unit Appraisal Report, Fannie Mae Form 1073 (Freddie Mac Form 465), as outlined on Fannie Mae’s appraiser forms page. Variants include desktop and hybrid versions and an exterior-only form. Which one your file gets depends on the automated underwriting findings, so do not count on a waiver. Comparable sales inside your building matter a lot, since a thin sales history can pull the value down.
Is Your Building the Problem? A Self-Check
Before you pay for an appraisal, run this triage with your HOA manager:
- Is the association in active litigation?
- Are there unfinished critical repairs or a pending large assessment?
- Is the master insurance current and adequate?
- Are many owners behind on dues?
- Does the building function as a hotel, timeshare or similar structure?
A “yes” to any of these is a flag worth raising with your loan officer first.
What If the Building Fails Review?
Cash-out is typically the hardest transaction for a building with problems, because waivers rarely reach it. You have a few paths:
| Situation | Realistic path |
|---|---|
| Fixable issue (insurance, repairs) | Wait for the association to cure it, then reapply |
| Project permanently ineligible | Explore a different product or lender type |
| Only need a small amount of cash | Compare a second-lien option |
| Don’t need cash after all | Keep your current loan or do a rate-and-term refinance |
Each path has its own cost and trade-offs. Some lenders use their own overlays beyond the agency rules, so a “no” from one is not always a “no” everywhere.
Cash-Out vs. a Home Equity Loan or HELOC
A cash-out refinance replaces your first mortgage with a single new loan.
| Factor | Cash-out refinance | Home equity loan or HELOC |
|---|---|---|
| Your first mortgage | Replaced | Stays in place |
| Number of loans | One | Two |
| Project review | Typically required | Varies by lender |
| Best when | Your current terms are weak anyway | Your current first mortgage is worth keeping |
The CFPB also cautions that a larger loan may raise your payment and lengthen your payoff. It notes that paying other debts with mortgage debt can increase foreclosure risk. CFPB research found that paying off other debts was the most common reason borrowers took cash out, with home repairs second, per its cash-out refinance report.
If you hold a first mortgage you like, a separate second lien may serve you better. If you would refinance anyway, cash-out folds everything into one loan. That is the flip point.
Step by Step: From Pre-Check to Closing
1. Check your two clocks: six months on title, twelve months on the loan.
2. Run the building self-check above.
3. Ask your HOA for the questionnaire and documents.
4. Compare programs and have your lender review your credit, ratios and equity.
5. Complete the condo appraisal and project review.
6. Review your Loan Estimate and, later, your Closing Disclosure.
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
Warrantable: A condo project that meets agency standards for finances, insurance, litigation and condition, so a conventional loan can be sold to Fannie Mae or Freddie Mac.
Project review: The lender’s check of the association’s budget, insurance, legal exposure and repairs, separate from your own file.
Seasoning: The minimum time you must own the home and hold the existing loan before a cash-out refinance.
Loan-to-value (LTV): The new loan amount divided by your home’s appraised value.
Limited cash-out refinance: A refinance that pays off the old loan and costs, with only small incidental cash back.
Frequently Asked Questions
Can I do a conventional cash-out on a second-home condo?
Yes, but the ceiling drops. Fannie Mae’s matrix holds second homes to 75% on cash-out, versus 80% for a one-unit principal residence. Occupancy decides the tier, so the home you live in gets the highest leverage.
Does it matter if my building has a lawsuit?
Often, yes. Pending litigation against the association is one of the items a project review examines, and it can make the project ineligible. The type and size of the case matter, so ask your lender early before paying for an appraisal.
Do I need a new appraisal?
Usually, though not always. The form is the condo unit appraisal report, and variants exist. Whether your file can use a lighter version depends on automated underwriting findings and the lender, so it cannot be promised in advance.
What credit score do I need?
The wholesale conventional programs generally start at a 620 decision score. The no-mortgage-insurance 89.99% lane asks for 680. Pricing and approval depend on your full file, and lender guidelines apply.
Can I wait and use a different loan if my building fails?
Yes. You can wait for the association to cure the issue, try a lender with different overlays, or compare a second lien. Cash-out is usually the hardest transaction for a problem building, so the alternatives deserve a real look.
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. Reach out at 828-256-2183 or through the quote form.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Lendmire arranges FHA, VA, conventional and jumbo purchase and refinance loans through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. 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. LLPA Matrix
2. Fannie Mae Eligibility Matrix
3. CFPB Guide to Using Home Equity
4. Freddie Mac Condominium Unit Mortgage FAQ
5. Fannie Mae Selling Guide B4-2.1-02, Waiver of Project Review
6. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
7. Fannie Mae appraiser forms page
8. CFPB: CFPB Report Finds Cash Out Mortgage Refinance Borrowers Improve Credit Scores
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: Conventional Loan Limited Cash-Out Refinance Requirements · Conventional Cash-Out Refinance for the Lock-in Homeowner · How to Do a Conventional Loan Refinance Without Taking Cash Out
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.