The Quick Read: Yes. The ceiling depends on the loan program, and also on occupancy and unit count. On a conventional loan, the cap is 80% on a one-unit primary home and 75% on two- to four-unit primary homes, second homes and investment property. FHA sits at 80% of adjusted value. VA works differently, with a ceiling that reaches 100% of value once the financed funding fee is counted. All figures are subject to lender guidelines and full file review, and none is a commitment to lend.
What Does “Maximum LTV” Actually Cap?
Maximum LTV caps the whole new loan, not the cash you receive. LTV is the new loan balance divided by the appraised value of the home. The cash in your hand is what remains after the new loan pays off your old mortgage and covers closing costs.
Cash-out refinance estimate
The starting figures are an example value with a balance and a cash request in proportion. Replace them with yours.
Editable benchmark: 7.32% as of October 22, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a cash-out refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $193,000 current balance, the agency cap on a one-unit principal residence, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a cash-out refinance quote; a cash-out loan is priced by the lender at lock. The cash available is the loan the program cap allows less the balances paid off, before closing costs, which are not included. The HELOC line is the program’s combined loan-to-value ceiling applied to the same value and balance. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages.
The math runs in three steps:
1. Multiply the appraised value by the program’s cap. That is the largest loan allowed.
2. Subtract the payoff of your current mortgage, plus any second lien that must be paid.
3. Subtract closing costs. What’s left is your cash.
A low appraisal hurts twice. It shrinks the largest allowed loan, and your payoff stays the same, so the check gets smaller. Picture a homeowner who expects an 80% conventional cap on a value that comes in a few percent below the estimate. The cash can drop by far more than a few percent, because the payoff doesn’t move.
The Consumer Financial Protection Bureau describes LTV the same way: the amount financed compared with the appraised value. Lenders use it to decide whether to lend, how much, whether mortgage insurance is needed and how the loan is priced. Higher LTV generally means higher cost.
How Do the Caps Compare by Loan Type?
The cap changes by program, and within conventional it also changes by property use. Here is the side-by-side view.
| Loan type | Cash-out ceiling | What shapes it |
|---|---|---|
| Conventional, 1-unit primary | 80% LTV | Credit, reserves, seasoning |
| Conventional, 2-4 unit primary | 75% LTV | Stricter score and reserves |
| Conventional, second home or investment | 75% LTV | Occupancy |
| FHA cash-out | 80% of adjusted value | Owner-occupancy history |
| VA cash-out | Up to 100% of value, fee included | Net tangible benefit |
| Conventional, wholesale 89.99% lane | 89.99% LTV, no mortgage insurance | 680 score, 50% ratio, fixed rate |
| FHA Streamline, VA IRRRL | Not cash-out products | No cash taken out |
Two details matter before you trust any row. First, lenders can set their own limits below the agency maximums, so the published ceiling is the most you can hope for, not a promise. Second, the cap is only one of several tests. Credit, debt-to-income ratio, reserves and seasoning can stop a file before leverage does.
What Is the Conventional Cap, and Why Does Unit Count Matter?
Conventional cash-out tops out at 80% LTV on a one-unit primary residence. On two- to four-unit primary residences, second homes and investment property, the ceiling drops to 75%. Lenders treat extra units and non-owner occupancy as higher risk, so they ask for more equity left in the property. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Fannie Mae’s Eligibility Matrix lays this out by unit count, and it also ties minimum credit score and reserves to the number of units. It requires reserves on cash-out loans when the debt-to-income ratio exceeds 45%.
Seasoning is the other conventional gate. Across the wholesale programs Lendmire places files with, the first mortgage being paid off must be at least 12 months old, counted from note date to note date. A borrower must also have been on title for six months. There are exceptions for delayed financing, inheritance and legal awards.
There’s a wholesale lane worth knowing about. It reaches 89.99% LTV with no mortgage insurance, but it has narrow conditions: a 680 score, a 50% ratio ceiling, a thirty-year fixed rate, a primary residence, a conforming balance and its own six months of seasoning. For a borrower who fits all of it, the extra leverage without mortgage insurance changes the picture. For everyone else, 80% is the working number. In Texas, a cash-out on the homestead is capped by the state constitution at the agency figure, and the wholesale lane isn’t written there. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Mortgage insurance matters here too. It is required above 80% LTV, can be cancelled on request at 80% of original value with good payment history, and must end automatically at 78% under the Homeowners Protection Act.
What About FHA Cash-Out?
FHA cash-out is capped at 80% of adjusted value, which is the same headline number as conventional on a one-unit home. It wasn’t always. The cap was 85% until HUD Mortgagee Letter 2019-11 cut it to 80% for case numbers assigned on or after September 1, 2019. A lot of older web pages still quote 85%, and that figure is out of date. The letter does not apply to Section 247 mortgages.
“Adjusted value” is HUD’s version of the appraised figure, and it is the denominator in the math. HUD’s own knowledge-base answer confirms the 80% cap and the case-number cutoff.
Here’s the catch. Matching ceilings do not mean matching cost. FHA loans carry their own mortgage insurance structure, and conventional mortgage insurance depends on LTV and credit. The same home can leave you with about the same cash on either program and a different monthly budget afterward. Compare the Loan Estimates side by side before you choose.
How Does a VA Cash-Out Work?
VA is the outlier. The VA stopped guaranteeing refinance loans when LTV exceeds 100%, so the ceiling is the full reasonable value of the home. The financed funding fee counts toward that number. VA Circular 26-19-05 defines a cash-out as a loan where the amount, funding fee included, exceeds the payoff of the loan being refinanced. It also says every cash-out must show a net tangible benefit.
The 100% figure is a ceiling, not a typical outcome. Many lenders set their own lower caps, and a borrower who borrows to the limit also finances the funding fee into the balance. Credit, income and residual income still have to work.
Don’t confuse this with the VA IRRRL. The IRRRL is a streamline for an existing VA loan, and the general rule is that the borrower gets no cash out of it. Taking equity out turns it into a cash-out loan. Across the wholesale programs Lendmire works with, the IRRRL carries a 0.5% funding fee unless the veteran is exempt, no VA appraisal, a net tangible benefit test, and seasoning of the later of 210 days and six payments.
Do Streamlines and Rate-and-Term Loans Have a Cash-Out Cap?
No. FHA Streamline and VA IRRRL are no-cash-out products, so a cash-out LTV cap does not apply to them. Rate-and-term (limited cash-out) refinances are a separate transaction with higher leverage. On a conventional one-unit primary residence, a rate-and-term refinance reaches 95% LTV. It reaches 97% where the existing loan is agency-owned and the first-time-buyer program allows. Fannie Mae’s limited cash-out guidance adds extra requirements above 95%. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
The new loan pays off the existing first mortgage, the closing costs and any purchase-money second lien, with only incidental cash back. That’s the whole reason the cap is higher: you aren’t pulling equity out.
| Refinance type | Cash to borrower | Leverage |
|---|---|---|
| Conventional rate-and-term | Incidental only | 95% (97% in limited cases) |
| FHA rate-and-term with appraisal | None | 97.75% |
| FHA Streamline | None | No appraisal needed |
| Conventional cash-out | Yes | 80% (75% on 2-4 units) |
If you have a 95% rate-and-term option but want cash, ask a hard question. The extra cash costs you leverage on the entire loan, not just the new money.
Which Limit Binds First?
For many borrowers, LTV is not the limit that stops them. Work through the tests in this order:
- Loan limit. Does the new balance exceed the conforming limit? If so, the jumbo lanes take over, with their own score and leverage rules. A 660 decision score and 50% ratio ceiling on the fixed lanes are typical there.
- Debt-to-income. The automated finding governs most files, with a total ratio ceiling of 50%. Manually underwritten loans run 36% or 45%.
- Credit. Wholesale conventional programs start at a 620 decision score.
- Seasoning. The 12-month and six-month clocks above.
- Reserves. Required on some cash-out files, depending on unit count and ratio.
- Lender overlays. An individual lender can sit below the agency maximum.
The practical lesson: a high published ceiling tells you the most a program allows. It tells you nothing about whether your file clears the other gates.
Find Your Ceiling in Four Questions
1. What loan do you have now? An existing FHA or VA loan opens the streamline lanes. Those give no cash, but they may suit you if all you want is a different term.
2. How do you use the property? Primary residence gets the highest cash-out leverage. Second homes and investment property step down to 75%. One sentence settles it: occupancy decides the leverage.
3. How many units? One unit gets 80% conventional. Two to four units get 75%.
4. Where is the home? State rules can lower the ceiling, as Texas does on homestead cash-outs.
Say you are a veteran with a conventional loan and a one-unit primary home. VA cash-out may reach further than the 80% conventional cap, but the funding fee counts toward the balance. Now say you are a non-veteran with a one-unit primary home and a strong file. Conventional at 80% is the baseline, and the 89.99% wholesale lane is worth asking about if you meet each condition. The answer flips with the facts.
One more note on the decision. If you want a lower balance and a better term but not cash, the rate-and-term lane may fit better than cash-out. Pulling equity raises your debt, and the CFPB ties higher LTV to higher cost.
Key Terms Defined
LTV (loan-to-value): The new loan balance divided by the home’s appraised value.
Adjusted value: HUD’s version of appraised value, used as the FHA denominator.
Net tangible benefit: A required, documented gain to the borrower from a VA or FHA refinance.
Seasoning: How long you have held the loan or title before a refinance qualifies.
Limited cash-out refinance: A rate-and-term refinance that allows only incidental cash back.
Funding fee: The VA charge that can be financed into the loan and counts toward LTV.
Frequently Asked Questions
Can I take 85% cash-out on an FHA loan?
No. The FHA cap was cut from 85% to 80% of adjusted value for case numbers assigned on or after September 1, 2019. Pages that still show 85% are out of date. Some lenders set a lower cap than the agency, so the number you’re offered can be below 80%.
Is the VA really allowed to go to 100%?
Yes, as a ceiling. The VA does not guarantee refinance loans above 100% LTV, and a financed funding fee counts toward that figure. Many lenders set lower caps of their own, and you must show a net tangible benefit. The ceiling and the amount you’re offered are different things.
Why is the cap lower on a duplex than on a single-family home?
Conventional guidelines treat two- to four-unit homes as higher risk, so the cash-out cap is 75% LTV rather than 80%. Credit score and reserve requirements also rise with unit count. Second homes and investment property get the same 75% step-down. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Does a cash-out refinance require mortgage insurance?
On conventional loans, mortgage insurance is required above 80% LTV. At or below 80% it isn’t, and the 89.99% wholesale lane is a narrow exception that skips it under strict conditions. Where it applies, you can request cancellation at 80% of original value, and it ends automatically at 78%. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Does the cap apply to the cash or the whole loan?
It applies to the whole loan. The cap sets the largest new balance, and your payoff, any second lien and closing costs come out of that before you see cash.
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. See Lendmire’s cash-out refinance programs.
For your own numbers, request a scenario review with Lendmire.
For current guidelines and terms, see Lendmire’s refinance programs page.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges FHA, VA, conventional and jumbo home purchase and refinance financing in 16 states through wholesale lenders. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Consumer Financial Protection Bureau
2. Fannie Mae Eligibility Matrix
3. HUD Mortgagee Letter 2019-11
5. Fannie Mae Selling Guide B2-1.3-02, Limited Cash-Out Refinance Transactions
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 Lower Your Payment in Retirement With a Refinance · Cash-Out Refinance vs HELOC to Combine a First and Second Mortgage · How Much a Refinance Costs to Close When Rolled Into the Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.