The Quick Read: Usually no. A conventional cash-out refinance on a one-unit primary residence stops at 80% of the home’s value, and a wholesale lane reaches 89.99% for qualified borrowers on a thirty-year fixed. The one real exception is the VA program, which allows up to 100% of appraised value for eligible veterans. Most of the high-leverage numbers you see (95% to 97%) belong to rate-and-term refinances, which give you almost no cash.
What Is the Difference Between Cash-Out and Rate-and-Term?
A cash-out refinance replaces your mortgage with a bigger one and hands you the difference. A refinance without meaningful cash back replaces it at close to the same balance. That split explains most of the confusion about leverage.
Across the wholesale programs Lendmire places files with, a rate-and-term refinance on a one-unit principal residence reaches 95% loan-to-value (LTV), and 97% where the existing loan is agency-owned and the first-time-buyer program allows. Those loans pay off the first mortgage, closing costs and a purchase-money second lien. Only incidental cash comes back. The Fannie Mae Eligibility Matrix draws the same line: limited cash-out refinances carry much higher ceilings than true cash-out transactions.
So “nearly full value” is real. It just doesn’t come with cash.
How Is the Maximum Cash-Out Loan Calculated?
Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
The maximum loan equals the appraised value times the program’s LTV cap. Your cash is what remains after the payoff, closing costs and any liens that must be cleared.
Think of it in percentages. If the cap is 80%, the new loan can be 80% of value. Subtract the balance you owe, subtract costs, and the remainder is yours. A home with a balance already near 70% of value leaves only a thin slice of cash at an 80% cap. A home with a balance near 40% leaves a large one.
Two points matter here:
- Value is set by the appraisal. A low number shrinks everything downstream.
- The cap is a ceiling, not a promise. Credit, income, occupancy and seasoning still decide whether you reach it.
Why Do Lenders Cap Cash-Out Below Full Value?
Lenders want an equity cushion. If prices dip or the borrower struggles, the cushion absorbs the loss before the lender does. Cash-out loans carry more risk than rate-and-term loans because the borrower is pulling wealth out of the home, so caps run lower.
The federal consumer-finance regulator’s guide to using home equity says lenders typically require you to keep a share of your home value as equity. Treat that as general guidance, not a program rule. The actual caps come from each program.
What Are the Caps by Program?
Conventional, FHA and VA each set a different ceiling. Only VA reaches the full value.
| Program | Cash-out ceiling | Notes |
|---|---|---|
| Conventional, 1-unit primary | 80% LTV | Wholesale lane to 89.99% with conditions |
| Conventional, 2-4 unit primary | 75% LTV | Lower than 1-unit |
| Conventional, second home | 75% LTV | Lower than primary |
| FHA | 80% of Adjusted Value | Applies to current case numbers |
| VA | Up to 100% of reasonable value | Eligible veterans; funding fee counts |
Conventional
The Fannie Mae matrix lists 80% for a one-unit principal residence and 75% for two to four units. Second homes also sit at 75% in the programs Lendmire works with, which is why occupancy decides leverage.
One wholesale lane reaches 89.99% LTV with no mortgage insurance. It requires a 680 score, a 50% ratio and a thirty-year fixed on a primary residence with a conforming balance, plus six months of seasoning. In Texas, the state constitution caps a homestead cash-out at the agency figure, so that lane is not written there. Every figure here varies by lender and program: guidelines, property type, leverage, and credit profile all apply.
FHA
Older case numbers carried an 85% cap, which is where the outdated “FHA goes to 85%” idea comes from. Any second mortgage or HELOC that stays on the home counts toward the 80% cap, so it uses up room instead of creating it. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
VA
VBA Circular 26-19-05 says VA no longer guarantees refinance loans when LTV exceeds 100%. The loan, including a financed funding fee, divided by the appraiser’s reasonable value cannot go over that line. The circular also applies a net tangible benefit test to every cash-out refinance, meaning the loan must offer the borrower a real advantage.
Lendmire’s piece Can a Veteran Get a VA Cash-Out Refinance for the Full Home Value? covers the veteran path in more detail. The VA’s cash-out page adds that you must live in the home, and that the loan can pay off a non-VA mortgage.
Here’s the catch. Even VA’s 100% is a ceiling. The funding fee counts toward it, so financing a large fee cuts the cash you receive. And individual lenders may set their own lower limits, since VA says lenders follow its standards and may add their own.
Does “Nearly Full Value” Ever Apply to Everyone Else?
Only on the rate-and-term side. If your goal is lowering a payment or changing a term, 95% to 97% leverage can work. If your goal is cash, the cap is 80% on most conventional and FHA loans.
Existing government loans have streamlines that sit near full value, but none of them provide cash:
- FHA Streamline applies to an existing FHA loan, with no appraisal, limited credit review and a net tangible benefit test.
- VA IRRRL applies to an existing VA loan, with a 0.5% funding fee unless exempt, no VA appraisal and seasoning of the later of 210 days and 6 payments. VA’s IRRRL page states you may not receive cash from the proceeds.
A VA streamline cannot be combined with a cash-out. People mix these up often. Don’t.
What Can Shrink the Cash You Actually Receive?
Several things pull the real number below the headline cap:
- A low appraisal. The whole calculation runs off value.
- Property type. Two- to four-unit homes drop to 75%. Manufactured housing is treated separately under Fannie Mae’s product rules, and some single-width homes don’t get standard cash-out terms.
- Occupancy. Second homes carry lower caps than primary residences.
- Existing liens. A second mortgage that stays in place eats into the cap.
- Financed costs. Closing costs and, for VA, the funding fee come out of the same ceiling.
- Credit and ratios. Wholesale conventional programs start at a 620 decision score. The automated finding governs most files, with a 50% total ratio ceiling. Manually underwritten loans use 36% or 45% ratios, tied to reserves and score factors in the Eligibility Matrix.
Jumbo lanes take over above the conforming limit, with a 660 decision score and different leverage. Those figures vary by lender and file.
What Are the Seasoning and Document Requirements?
Conventional cash-out has two clocks. The first mortgage you’re paying off must be at least 12 months old, measured note date to note date. You also need to have been on title for 6 months. Exceptions exist for delayed financing, inheritance and legal awards.
Expect to provide:
1. A payoff statement for every lien.
2. Income and asset documents.
3. A title search and appraisal.
4. For VA, a Certificate of Eligibility and net tangible benefit documentation.
The Loan Estimate and Closing Disclosure apply to all of these loans. Closing costs on a VA cash-out can add up to thousands of dollars, and the exact amount depends on the loan and the lender.
What Does It Cost to Borrow the Last Slice of Value?
More leverage means more risk, and that tends to show up in the terms. The new rate and term apply to your entire balance, not just the new money. A cash-out refinance resets the whole loan.
Mortgage insurance also enters the picture above 80% LTV on conventional loans. You can request cancellation at 80% of original value with a good payment history, no subordinate liens and no decline in value. The servicer must end it automatically at 78%. Published typical annual premiums run 0.58% to 1.86% of the balance, a range and not a quote. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
What Are the Risks of Borrowing Close to Full Value?
The main risk is a thin cushion. If values fall, a loan near 100% of value can leave you owing more than the home is worth. That makes selling or refinancing difficult.
The CFPB’s research on cash-out refinances notes that converting non-mortgage debt into debt secured by the home can put the house at risk of foreclosure if payments become unsustainable. It also notes that cash-out borrowing draws down wealth that could fund future needs.
The CFPB’s earlier release found paying off other debts was the top reason borrowers gave for cash-out, cited by more than 50% in 2014 to 2019 and more than 40% in 2020 to 2021. Credit scores improved sharply at first, then gradually worsened, though they stayed above pre-refinance levels.
Three downsides deserve a hard look:
- Payment shock. The new loan replaces the old one at today’s terms.
- Appraisal risk. A low valuation can cut the cash or end the deal.
- Reset clock. Years of principal paydown start over.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Is It the Right Move for You?
It depends on what the cash is for and how long you’ll stay. A cash-out refinance tends to make sense for a borrower who has a clear use for the money, comfortable room in the monthly budget, and plans to keep the home. It tends to fit poorly when the cash covers recurring spending, or when the existing loan has terms worth keeping.
Run through these questions:
1. What will the cash do? One-time costs differ from ongoing expenses.
2. Can the new payment hold up if income dips?
3. How long will you stay in the home?
4. Would a rate-and-term refinance, a smaller cash-out or another route meet the goal?
If you’re weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches. Details on the cash-out refinance programs Lendmire arranges are on its cash-out refinance page. All figures are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
Key Terms Defined
Loan-to-value (LTV): The new loan amount divided by the home’s appraised value.
Cash-out refinance: A new, larger mortgage that pays off the old one and gives you the difference.
Rate-and-term refinance: A refinance that changes the rate or term and returns only incidental cash.
Seasoning: The minimum time you must have held the loan or the title before refinancing.
Net tangible benefit: A test showing the refinance gives the borrower a real advantage.
Funding fee: A VA charge that can be financed but counts toward the 100% ceiling.
Frequently Asked Questions
Can I cash out 100% of my equity?
Only through the VA program, and only if you’re an eligible veteran living in the home. Even then, the funding fee counts toward the ceiling and many lenders set a lower limit. Conventional and FHA cash-out loans stop at 80% on most primary residences.
Does a paid-off home change the answer?
Not the cap. A home with no mortgage still faces the same ceiling, such as 80% for conventional. What changes is the cash: with nothing to pay off, more of the maximum loan comes to you, minus costs.
Is a 95% or 97% refinance a cash-out?
No. Those figures belong to rate-and-term refinances, which return only incidental cash. People often see “97%” and assume it applies to cash-out. It doesn’t.
Can a second mortgage or HELOC get me past the cap?
No. On an FHA loan, any lien that stays counts toward the 80% combined cap. Adding a second lien uses up room.
What if the appraisal comes in low?
The maximum loan falls with it, and so does your cash. Ask your loan officer what happens at a lower value before you pay for anything beyond the appraisal.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging FHA, VA, conventional and jumbo purchase and refinance loans through a wholesale lending network. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Eligibility Matrix
2. CFPB’s guide to using home equity
5. VA Interest Rate Reduction Refinance Loan
6. CFPB’s research on cash-out refinances
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Get the Most From a Cash-Out Refinance on Your Home · How Much Cash You Can Get on a Second Home Cash-Out Refinance? · Can You Pull Cash Out of a Second Home With a Cash-Out Refinance?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.