The Quick Read: Fannie Mae caps a cash-out refinance on a one-unit investment property at 75% LTV, which sits below the 80% cap it allows on a one-unit primary residence. That cap applies only to loans sold to the agency, and DSCR loans are not sold to the agency, so it does not govern them. Across the wholesale network Lendmire works with, cash-out on a standard rental also tops out around 75% LTV, but the qualifying test is rental coverage instead of personal debt-to-income. Exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
- The agency cap on a one-unit rental cash-out is 75% LTV, per the Fannie Mae Eligibility Matrix.
- Agency cash-out has two clocks: six months on title and a 12-month age on the existing first mortgage.
- Delayed financing helps cash buyers only. A bridge or hard-money purchase generally disqualifies it.
- DSCR cash-out files in the network run to about 75% LTV on standard rentals, about 6 months of seasoning, and a 1.00 coverage floor on select programs, subject to lender guidelines.
- A cap is a ceiling, not a cash figure. The appraisal, the payoff, and reserves decide what you actually receive.
What Is the Fannie Mae Cap on Investment Property Cash-Out?
The cap on a one-unit investment property cash-out refinance is 75% LTV, CLTV, and HCLTV. The Fannie Mae Eligibility Matrix lists 80% for a one-unit primary residence and 75% for a one-unit second home. Investment property sits at or below every owner-occupied cap. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
DSCR Cash-Out Calculator
Run the cash-out numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 15, 2026
Prefilled with starting assumptions — enter your property’s value, balance, taxes, and insurance for a more accurate picture.
Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
As of Oct 15, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Property value, balance, taxes, and insurance are editable estimates. Maximum loan-to-value varies by lender, program, property type, and seasoning. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
Two-to-four-unit rentals carry a separate row on the matrix, and the cap there is lower than the one-unit figure. Read that row on the live matrix before relying on a number. The matrix is revised periodically, so check the live version before sizing any file; a printed figure is only a snapshot.
Why is the rental cap lower? Rental owners walk away from a failing property more readily than owners who live in it. Lenders price that risk by leaving more equity in the building.
Key Terms Defined
Cash-out refinance: A new loan that pays off the existing first mortgage and returns proceeds above a small allowance to the borrower.
LTV: Loan-to-value, the new first mortgage divided by the appraised value.
CLTV: Combined loan-to-value, which adds any second liens to the first mortgage before dividing by value.
HCLTV: Home-equity combined loan-to-value, which counts the full credit line on a HELOC, drawn or not.
Seasoning: The minimum time a borrower has owned the property, or the existing loan has existed, before cash-out is allowed.
PITIA: Principal, interest, taxes, insurance, and association dues. This is the monthly obligation that DSCR coverage is measured against.
DSCR: Debt service coverage ratio, rent used for lender review divided by PITIA.
How Does Agency Underwriting Treat a Rental Cash-Out?
Agency underwriting runs the file through a fixed sequence, and each step can stop it. Here is the order.
1. Classify the transaction. If the loan pays off the first mortgage and returns more than a small allowance, it is cash-out. The allowance for a limited cash-out refinance is the lesser of 2% of the new loan or $2,000.
2. Check the title clock. Under Fannie Mae’s cash-out guide, at least one borrower must have been on title for six months before the new loan is disbursed.
3. Check the loan-age clock. An archived version of the same guide adds that an existing first mortgage being paid off must be at least 12 months old. It does not apply to subordinate liens being paid off.
4. Order the appraisal. Rental files use the 1007 rent schedule or the 1025 small-income-property report, both listed on Fannie Mae’s forms page.
5. Support the lease. Per Fannie Mae’s Quality Insider, lease terms can be supported by two consecutive months of bank statements or transfers matching the rent. For a new lease, the alternative is the security deposit and first month’s rent with proof of deposit.
6. Size the loan. The maximum new loan is the appraised value times the LTV cap. From that loan amount, subtract the payoff and closing costs to find the cash the borrower receives. Personal DTI and credit also have to work.
Reserves are a separate gate. The same guide calls for six months of reserves when the DU casefile shows DTI above 45%.
Freddie Mac, the other agency, follows a similar pattern. It requires six months on title and a new appraisal, and it allows 1-4 unit investment properties.
Where Does the General Rule Break?
Four edge cases change the answer.
Delayed financing. A borrower who bought within the past six months can still do a cash-out refinance if the original purchase was arm’s-length and the settlement documents show no mortgage financing was used. Per the archived guide, an LLC or partnership buyer qualifies only if the borrowers own 100% of it. Delayed financing does not cash you out at appraised value. Sizing ties to documented investment, so a bridge or hard-money purchase generally disqualifies it.
Inheritance and legal award. The archived 2020 guide lists inheritance and legal awards, such as a divorce, as no-wait exceptions.
Prohibited practices. The agency bars refinances structured to dodge cash-out policy and pricing.
Titling. Agency loans generally want personal-name or eligible-trust vesting. The LLC carve-out above is the narrow exception.
Consumer sites also blur the clocks. Some say 12 months for everything. The six-month figure is title seasoning, and the 12-month figure is the age of the existing first lien. Two tests, not one.
What Does the Decision Look Like for an Investor?
Picture an investor with six rentals and a self-employed tax return. Agency qualifying counts only 75% of gross rent, then layers in personal DTI. Add a count of financed properties, and the file gets heavy. This is why many investors look outside the agency box.
Now picture a BRRRR investor who bought with bridge money, rehabbed, and leased the unit. Delayed financing is off the table because the purchase was financed. The agency’s six-month title clock and 12-month loan-age clock both apply. A DSCR file looks at seasoning too, but the expectation is about 6 months of ownership, and the test is rent against PITIA.
Fannie Mae max LTV is the wrong question for a DSCR borrower. The right questions are the program’s own cap, seasoning, and coverage.
How Does a DSCR Cash-Out Compare?
DSCR loans are business-purpose loans designed for non-owner-occupied investment properties, so they are reviewed differently from a standard owner-occupied mortgage. The agency matrices do not bind them. Here is how the two paths compare, using the network’s typical figures, which are subject to lender guidelines.
| Factor | Agency cash-out | DSCR cash-out (network) |
|---|---|---|
| Max LTV, one-unit rental | 75% | About 75% |
| Qualifying income | Personal DTI, 75% of rent | Property rent vs PITIA |
| Seasoning | 6 months title, 12-month loan age | About 6 months of ownership |
| Coverage test | None | 1.00 floor on select programs |
| Credit | Agency overlays | 620 floor in parts of network, most want about 660 |
| Entity title | Personal or trust, narrow LLC carve-out | LLC vesting depends on program |
Across the wholesale network, 1.00 is where select programs start. Stronger coverage opens better pricing and leverage. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Credit of 700 or more unlocks the strongest leverage tiers. Loan sizes run to about $3,000,000 on standard programs. Reserves are commonly around 6 months of PITIA and step up to about 9 months above $1,500,000.
Short-term rental collateral is capped lower. Cash-out on a short-term rental tops out around 70%, versus about 75% on a standard long-term rental. Expect a 640 or better score and about 12 months of hosting history. Manufactured homes, log homes, and barndominiums are not offered in the DSCR programs.
Read the complete DSCR loans guide for the full program map.
What Decides How Much Cash You Actually Get?
The cap is a ceiling on the loan, not a promise of cash. Four things shrink the proceeds.
- Appraisal. The cap applies to appraised value. A low appraisal cuts the loan dollar for dollar at the same LTV.
- Payoff. The new loan first retires the existing first mortgage, then costs.
- Subordinate liens. On an agency file, a HELOC or second lien counts toward CLTV and HCLTV, so it eats into the same cap.
- Reserves and coverage. On a DSCR file, rent must cover PITIA at the new loan size. A bigger loan means a bigger PITIA, so the coverage test can bind before the LTV cap does.
Consider a rental valued well above its payoff where rent only just covers the new obligation at 75%. The coverage ratio, not the LTV cap, sets the loan. A lender may size down until the number clears. Leverage and coverage are two tests, and the file has to pass both.
Clearing 1.00 is also not the same as positive cash flow. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capex sit outside the calculation.
What If the Cap Leaves You Short?
You have four moves.
1. Wait. If seasoning is the problem, the clock solves it.
2. Pay down or leave the cash. A smaller loan lowers LTV and PITIA, which can lift coverage.
3. Improve the file. Documented lease terms, a stronger credit score, and a clean appraisal packet help. A renovation may support a higher appraised value, depending on comps and underwriter review.
4. Switch rulebooks. If DTI or portfolio size is the blocker on an agency file, a DSCR cash-out qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Related reading: Lendmire’s piece on the Fannie Mae max cash out investment property.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
Who Should Skip the Agency Route?
Skip it if you hold many financed properties, show thin personal income after deductions, or bought with short-term financing and need cash inside the delayed-financing window. Skip it if the property sits in an LLC you cannot retitle. Stay with it if you have strong traditional employment income, few financed properties, and a long-held, fully seasoned rental.
Before you apply, gather these:
- Settlement statement showing when you took title
- Existing mortgage note date
- Current leases, plus bank statements matching rent deposits
- Entity documents, if the property is titled in an LLC
- Reserves documentation
- A payoff statement for every lien
Frequently Asked Questions
Does Fannie Mae allow cash-out on an investment property?
Yes. Fannie Mae allows it on one-unit rentals at a 75% maximum LTV, per its current matrix. Title seasoning and loan age rules apply, and the borrower has to qualify on personal DTI and credit.
What is the max LTV by unit count?
For a one-unit investment property, the matrix lists 75% on a cash-out. Two-to-four-unit rentals sit on a separate matrix row at a lower cap, so read that row on the live matrix before sizing a multi-unit file.
Can an LLC take an agency cash-out?
Rarely. Agency loans generally require personal-name or eligible-trust vesting. The one carve-out is delayed financing where the borrowers own 100% of the entity. DSCR programs often accept LLC titling, subject to program terms.
How long do I have to own the property first?
Six months on title, and the existing first mortgage generally has to be 12 months old. Inheritance and legal awards are no-wait exceptions. DSCR cash-out files in the network expect about 6 months of ownership.
Do agency caps apply to a DSCR loan?
No. DSCR loans are not sold to Fannie Mae. On a DSCR cash-out of a standard rental, the network tops out around 75% LTV, with a 70% ceiling on short-term-rental collateral, subject to lender guidelines.
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals. Lendmire is a broker that arranges financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Call 828-256-2183 or request a quote.
About Lendmire
Lendmire (NMLS# 2371349) is a DSCR-focused mortgage broker that helps arrange investor financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR eligibility is generally reviewed by the lender around the property’s rental income rather than personal income documentation, subject to lender guidelines, which works for self-employed investors, LLC operators, and portfolios above four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Fannie Mae Eligibility Matrix
2. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
This article is part of Lendmire’s investment property cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Reach the Highest LTV Tier on a DSCR Cash-Out · Standard vs Top-Tier DSCR Cash-Out LTV for a BRRRR Exit · Fannie Mae Cash-Out Refinance Eligibility for Investors
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.