The Quick Read: The cap on a cash-out refinance depends on how you use the property. A one-unit home you live in tops out at 80% loan-to-value. A two- to four-unit home you live in, a second home, and an investment property each top out at 75%. The cap limits the new loan, not the cash you receive, because the new loan must first pay off what you owe today.
Key Takeaways
- Occupancy and unit count pick your row in the Fannie Mae Eligibility Matrix. Your credit and income then decide how much of that cap you can use.
- Second liens and HELOCs count toward the cap. The limit covers your total debt against the home, not just the first mortgage.
- The high 95% and 97% leverage numbers belong to purchases and limited cash-out refinances, not to a true cash-out.
- A lower appraisal shrinks your maximum loan by the cap percentage times the value you lost.
- Seasoning rules decide when you can refinance after buying: six months on title and a first mortgage at least 12 months old. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
What Does LTV Mean on a Cash-Out Refinance?
LTV, or loan-to-value, is the new loan amount divided by the appraised value of the home. A loan of 80% LTV leaves 20% of the value untouched as your equity. The lender uses the appraised value, not what you think the house is worth. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
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.
Two cousins of LTV show up in the guidelines:
- CLTV (combined LTV) adds any second mortgage that stays in place.
- HCLTV (home equity combined LTV) goes further and counts the full credit limit of a HELOC, even if you have not drawn it.
The matrix applies one ceiling across all three measures. So a HELOC you keep can eat into the room your new first mortgage has. Many homeowners miss this. They check the first-mortgage math, then learn the HELOC limit counts too.
The Limits by Occupancy Type
The cap depends on two facts: how you occupy the home and how many units it has. You declare occupancy, and the appraisal confirms the unit count. Together they select the row. Across the wholesale programs Lendmire places files with, the Fannie Mae conventional cash-out caps look like this, subject to lender guidelines and full file review:
| Occupancy | Units | Max LTV (cash-out) |
|---|---|---|
| Principal residence | 1 unit | 80% |
| Principal residence | 2–4 units | 75% |
| Second home | 1 unit | 75% |
| Investment property | 1–4 units | 75% |
The Fannie Mae Eligibility Matrix publishes these caps for fixed-rate and adjustable-rate loans alike. Some lenders set stricter limits than the agency, especially on multi-unit scenarios, so your quote can land below the table.
The pattern is simple: occupancy decides leverage, and a home that is not your primary residence sits at the lower cap. The lower ceiling reflects the risk the agencies see in those homes. Borrowers tend to walk away from a default on a second home or rental before they walk away from the place they live.
If you want the lane above the conforming balance, Lendmire’s piece Jumbo Cash-Out Refinance LTV Limits by Lane and Occupancy covers how those caps differ.
How Is a Cash-Out Refinance Underwritten, Step by Step?
A cash-out refinance moves through the same sequence on every file. Knowing the order tells you where a deal can stall. Lendmire’s cash-out refinance programs follow this path through the wholesale lenders it works with.
1. Classify the loan. Per Fannie Mae Selling Guide B2-1.3-03, a cash-out refinance pays off your existing mortgage through a new first mortgage on the same property. It can also be a new mortgage on a home you own free and clear. If you take more than the small cash-back allowance of a limited refinance, it is cash-out.
2. Set occupancy and units. You declare how you use the home. The appraisal confirms the unit count. Those two facts pick the cap.
3. Order the appraisal. The appraised value is the denominator. The maximum loan is the cap multiplied by that value.
4. Build the loan amount. The new loan must cover four things, in this order: the payoff of the existing first mortgage, any other liens being paid off, financed closing costs, and then your cash.
5. Check ownership and seasoning. At least one borrower must have been on title for six months. Any first mortgage being paid off must be at least 12 months old.
6. Run credit, ratios and reserves. Automated underwriting reviews your score, total debt ratio and cash reserves. The wholesale programs start at a 620 decision score, and the automated finding sets a total ratio ceiling of 50% on most files.
7. Resolve conditions. If the home was listed for sale, it must come off the market on or before the disbursement date.
Each step can shrink the number on step four. The cap is a ceiling, and your file decides how close you get.
What Do You Actually Walk Away With?
Consider a home you live in, with the first mortgage at 65% of the appraised value. At the 80% cap, the new loan can reach 80% of value. That leaves roughly 15 percentage points of value as potential cash, before closing costs come out. Run the same home as a second home or investment at 75%, and the room drops to about 10 percentage points. Same house, same balance, one-third less cash.
Now say the appraisal comes in 5% lower than you hoped. The cap applies to the lower value, so the maximum loan drops by 80% of the value you lost (75% on a lower-cap occupancy). Your existing balance does not shrink, so nearly all of that drop comes out of your cash. An owner with a large balance might see little or no cash at 80%. Run the math on your own balance before you apply.
Pricing is the other factor. B2-1.3-03 includes loan-level price adjustments, which means cash-out pricing differs from a rate-and-term refinance. The cost depends on factors such as leverage, credit score and occupancy. Your Loan Estimate shows the actual terms.
Where Does the Cap Stop Being the Whole Story?
Debt ratio, reserves and credit sit alongside the LTV cap. When the debt ratio on an automated file exceeds 45%, Selling Guide B2-1.3-03 requires six months of reserves. Reserves mean liquid assets left after closing. A file at the cap with thin reserves can stall, even with plenty of equity.
Mortgage insurance rarely enters a cash-out at the standard caps. Insurance is required above 80% LTV, and the one-unit primary cap stops at 80%. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Edge Cases: Where the General Rule Breaks
The 89.99% lane. One wholesale lane reaches 89.99% LTV with no mortgage insurance. It requires a 680 score, a 50% ratio, a thirty-year fixed rate, a primary residence and a conforming balance. It carries its own six months of seasoning. Texas is the exception: the state constitution caps a homestead cash-out at the agency figure, so Lendmire does not place this lane there. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
House hacking. Live in one unit of a duplex, triplex or fourplex and the property is a principal residence with two to four units. The cap is 75%, not 80%.
Fannie Mae’s Manufactured Housing Product Matrix lays out the separate terms that apply to manufactured homes. Treat the table above as a one-unit site-built home rule and check the manufactured matrix directly.
Special programs. Community-seconds financing is not permitted on a cash-out. Reserve and score tables also vary by program.
Free and clear homes. A new mortgage on a home with no existing loan counts as cash-out, even if you take almost no cash. Many owners assume small cash means limited cash-out. It does not.
PACE loans. If you have enough equity to pay off a PACE obligation and choose not to, the loan can become ineligible for cash-out. Your lender will confirm the current guide wording.
Cash-Out vs. Limited Cash-Out: Don’t Mix the Numbers
The 95% and 97% figures belong to a different transaction. A limited cash-out refinance, also called a rate-and-term refinance, pays off your existing first mortgage, closing costs and a purchase-money second lien. You get only incidental cash back. Selling Guide B2-1.3-02 covers it.
| Feature | Limited cash-out | Cash-out |
|---|---|---|
| Purpose | Lower balance or change term | Take equity out |
| One-unit primary max LTV | 95% (97% in narrow cases) | 80% |
| Cash back | Incidental only | Any purpose |
| Mortgage insurance | Above 80% LTV | Rarely applies at the cap |
If you search for a “97% LTV refinance” and then ask for cash, you are mixing two products. Decide which one you need before you read a number. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
What Are the Timing Rules?
Two clocks run before you can cash out. One borrower must have been on title for six months. Any first mortgage you are paying off must be at least 12 months old, counted from note date to note date.
There are exceptions. Delayed financing lets a cash buyer refinance sooner, as long as the original purchase was an arm’s-length transaction. Inheritance and legal awards are other named exceptions. B2-1.3-03 has the exact wording.
What If You Are Over the Cap?
You have several paths when the numbers do not fit, and each has a tradeoff.
- Take less cash. The cap limits the loan, so a smaller cash request may fit. Closing costs still come out of the same room.
- Pay down a lien first. Paying off a HELOC can free room, because it counts toward the combined cap.
- Wait for appreciation or paydown. Each month of payments and any rise in value widen the gap between the cap and what you owe.
- Check how the property is classified. The classification must match how you actually use the home. A misstatement of occupancy is a serious problem, not a loophole.
- Compare other programs. Some lanes reach higher leverage, such as the 89.99% option above, with their own score and seasoning conditions.
- Keep your current loan. If the numbers only work with a poor trade-off, the loan you have may be the better one.
The honest answer is often a smaller cash-out than you had in mind. Occasionally it is leaving the loan alone.
Key Terms Defined
LTV (loan-to-value): The new loan amount divided by the appraised value.
CLTV / HCLTV: LTV measures that add second liens (CLTV) and full HELOC credit limits (HCLTV).
Occupancy: How you use the property: principal residence, second home or investment.
Seasoning: The waiting period tied to how long you have owned the home or held your current loan.
Reserves: Liquid assets you keep after closing, counted in months of payments.
Delayed financing: An exception that lets a cash buyer refinance before six months on title.
Frequently Asked Questions
What is the maximum LTV for a Fannie Mae cash-out refinance on my primary home?
It is 80% for a one-unit principal residence and 75% for a two- to four-unit principal residence. These are agency caps, and lenders can set stricter limits based on credit, ratios and the property.
Does a HELOC count against the cash-out limit?
Yes. The cap applies to LTV, CLTV and HCLTV, so a second lien that stays in place counts. A HELOC counts at its full credit limit, even if you have drawn little of it.
Can I get 97% LTV on a cash-out refinance?
No. The 95% and 97% figures apply to purchases and limited cash-out refinances. A true cash-out on a one-unit primary residence stops at 80% under the standard program. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
How soon can I cash out after buying a home?
At least one borrower must be on title for six months, and a first mortgage you are paying off must be at least 12 months old. Delayed financing is the main exception for cash buyers. Inheritance and legal awards are others.
Is the cap the same as the cash I will receive?
No. The cap is a ceiling on the new loan. Your payoff, any liens paid off and financed costs come out first, and what remains is your 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. Program figures are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
For your own numbers, request a scenario review with Lendmire.
For current guidelines and terms, see Lendmire’s conventional loan programs page.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and home buyers in 16 states with FHA, VA, conventional and jumbo purchase and refinance loans arranged through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and the agency guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Eligibility Matrix
2. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
3. Fannie Mae Manufactured Housing Product Matrix
4. 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: Is a Fannie Mae Cash-Out Refinance Eligible for Homeready Terms? · Fannie Mae Limited Cash Out Refinance Requirements and Limits · Does Fannie Mae Require Seasoning Before a Cash-Out Refinance?
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
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.