The Quick Read: No single program wins for every homeowner, because the best one depends on the loan you hold now, how long you have owned the home, and whether you have military eligibility. On a one-unit primary home, the standard conventional ceiling is 80% LTV, and that cap applies to the whole new loan, not just the cash you take. Cash in hand is what remains after the payoff, financed costs, and any other liens. Subject to lender guidelines and full file review; nothing here is a commitment to lend.
Key Takeaways
- The 80% ceiling limits the total new loan against appraised value. It is not “80% of your equity.”
- Two conventional clocks apply: the loan you are paying off must be at least 12 months old, and a borrower must have been on title for 6 months, with named exceptions.
- FHA sits at the same ceiling as conventional. VA is the named exception, with a higher ceiling set at the lender’s option.
- Financed closing costs count against the ceiling, so they shrink your cash.
- A low appraisal reduces cash dollar for dollar at a fixed payoff.
What Does the Standard LTV Ceiling Actually Cap?
The ceiling caps the total new first mortgage as a share of appraised value. At 80% on a one-unit primary home, the new loan cannot exceed 80% of what the appraiser says the home is worth. You keep at least 20% as a cushion.
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: 7.24% as of October 29, 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 common misreading is “I have 20% equity, so I can pull out 20%.” That isn’t how it works, because the new loan has to pay off your existing mortgage first. Then financed closing costs come out. Only what remains reaches you.
Think of it as a funnel. Value times the ceiling gives the maximum loan. Subtract your payoff, any other liens, and financed costs. The result is your cash.
Lendmire’s cash-out refinance programs page lays out the lanes a broker can shop for this purpose. Across the wholesale programs Lendmire places files with, the 80% figure is the working number for a one-unit principal residence, and it drops to 75% on two- to four-unit principal residences, second homes, and investment property. Occupancy decides leverage. That is the only time rentals come up here.
Ceiling by Program and Property Type
For a conventional cash-out, the ceiling is 80% on a one-unit primary home. FHA uses the same ceiling, and HUD set its maximum LTV and combined LTV at 80% for cash-out refinances in a HUD Handbook 4000.1 update. Check the live Handbook for current wording. VA runs higher, up to full value at the lender’s option, and lenders often set their own limits below that.
| Program | One-unit primary home | Key condition |
|---|---|---|
| Conventional cash-out | 80% LTV | 12-month loan age, 6 months on title |
| Conventional, two- to four-unit primary | 75% LTV | Occupancy and unit count lower the cap |
| Conventional wholesale lane | Up to 89.99% LTV | No mortgage insurance, 680 score, 50% ratio, 30-year fixed, conforming balance |
| FHA cash-out | Same ceiling as conventional | Own seasoning and history rules |
| VA cash-out | Higher than conventional | Certificate of Eligibility, net tangible benefit |
| Rate-and-term (limited cash-out) | 95% LTV (97% in some cases) | Only incidental cash back |
The 89.99% lane deserves a closer look. It carries its own six months of seasoning, and it is not written in Texas, where the state constitution caps a homestead cash-out at the agency figure. For the exact conventional ceiling by occupancy and unit count, the Fannie Mae Eligibility Matrix is the reference. Pricing and overlays vary by lender.
How Do You Judge “Best” at the Ceiling?
The best program for your situation is the one that fits your eligibility first, then yields the most usable cash after costs. Judge it on five points:
1. Eligibility fit. Do you hold a VA loan, an FHA loan, or a conventional loan? Can you meet the seasoning clocks?
2. Cash after costs. Financed costs and payoffs come out of the ceiling.
3. Mortgage insurance. Conventional at or below 80% carries none. Above 80%, it applies, except in the conventional wholesale lane, which carries no mortgage insurance up to 89.99% LTV.
4. Documentation burden. Income, reserves, and ratios differ by lane.
5. Payment impact. A larger loan usually means a higher payment or a reset term.
Here is where the choice flips. A veteran with a VA loan and a goal of maximum cash may find the VA lane reaches more equity than 80% does. A homeowner with a conventional loan and strong credit may prefer the 80% lane to avoid the mortgage insurance that comes with higher leverage. Someone who only wants a better loan structure, with little or no cash, may be better off with a refinance at up to 95% LTV or a streamline. Cash-out is the right tool only when you need the cash.
A Worked Example With Percentages
Take a one-unit primary home that appraises at a round 100% of value. At the 80% ceiling, the new loan can be at most 80% of that value. Say your current mortgage balance sits at 55% of value. Financed closing costs take about 2% of value. Cash to you is roughly 80% minus 55% minus 2%, or about 23% of value.
Now run a low appraisal. If the home appraises 5% lower, the ceiling falls with it. The maximum loan is 80% of a smaller number, which is 76% of the original value. The payoff stays at 55% and costs stay near 2%. Cash drops to roughly 19% of the original value. A modest appraisal miss takes a visible bite, because the payoff does not move.
Pulling cash out, then, is a math problem before it is a decision. Run the funnel before you apply. These percentages are modeled assumptions, not market figures.
Which Program Fits Which Borrower?
- Conventional-eligible, strong credit. The 80% conventional cash-out is the baseline. Wholesale programs reach as high as 89.99% for some files, with a 680 score and a 50% ratio.
- Veteran with a VA loan. The VA cash-out can reach above conventional leverage, though a VA loan requires a Certificate of Eligibility and goes through a private lender, not VA directly. If you want no cash at all, the IRRRL is a VA-to-VA loan with no cash out.
- Existing FHA borrower. The FHA cash-out shares the 80% ceiling. The FHA Streamline is the no-cash option.
- Loan above the conforming limit. Jumbo lanes take over. They start at a 660 decision score, reach leverage to 90%, and run to $5,000,000, with a 50% ratio ceiling on the fixed lanes. Jumbo cash-out leverage differs from rate-and-term leverage, so confirm which applies.
- Credit events in the past. Agency waiting periods apply: four years from a chapter 7 discharge, seven from a foreclosure, four from a short sale or deed-in-lieu, with shorter periods for documented extenuating circumstances.
If you are choosing between two programs that both fit, the deciding variable is usually the loan you hold today. Your existing loan type often narrows the field before anything else.
Eligibility, Occupancy, and the Two Clocks
Conventional cash-out runs on two separate clocks, and people mix them up.
The first is loan age. Under the Fannie Mae Selling Guide B2-1.3-03, the mortgage being paid off must be at least 12 months old, measured from the existing note date to the new note date. Freddie Mac Guide §4301.5 applies the same 12-month test. A recent refinance creates a new note, which restarts that clock.
The second is time on title. Across the wholesale programs Lendmire works with, a borrower must have been on title for 6 months. Guidelines generally recognize an exception for property acquired through inheritance or a legal award, but the exact wording varies by program, so confirm the current terms with your loan officer.
Occupancy must be your principal residence. Unit count matters too, since two- to four-unit homes drop to 75%.
Underwriting basics. Wholesale conventional programs start at a 620 decision score. The automated finding governs most files, with a total ratio ceiling of 50%. Manually underwritten loans use 36% or 45% with the reserve and score factors in the Eligibility Matrix. Fannie Mae’s guide also requires six months of reserves when DTI exceeds 45% on a DU casefile.
Edge Cases Where the Rule Bends
- Delayed financing. A cash buyer can take cash out soon after purchase if the guide’s other cash-out requirements are met, and cash-out pricing applies.
- Inheritance or a legal award. Divorce or inheritance can waive the title clock.
- Free-and-clear homes. A paid-off home is still treated as cash-out under both agencies.
- Buying out a co-owner. A legal agreement can open a special path.
- Texas homesteads. Some states have their own equity-lending rules. Texas caps a homestead cash-out at the agency figure.
- Manufactured housing. Agency limits can restrict cash-out. Verify with a loan officer.
Mortgage Insurance and Payment Impact at the Ceiling
At 80% LTV on a conventional loan, mortgage insurance does not apply. Above 80%, it is typically required, though the wholesale lane here reaches 89.99% LTV with no mortgage insurance. You may request cancellation at 80% of original value with good payment history, no subordinate liens, and no decline in value. The servicer must terminate it automatically at 78% under the Homeowners Protection Act. Published typical annual premiums run 0.58% to 1.86% of the balance, a range and not a quote. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
The payment story matters more. A cash-out loan is bigger than the payoff, so your payment usually rises or your term resets. VA News cautions that a cash-out refinance very rarely lowers the monthly payment. Interest over the life of the loan also grows because the cash is added to the balance.
Cash-Out vs. Rate-and-Term vs. Other Equity Options
| Option | What it does | Cash back |
|---|---|---|
| Cash-out refinance | Replaces your first mortgage with a larger one | Yes, subject to the ceiling |
| Rate-and-term (limited cash-out) | Replaces the first mortgage, up to 95% LTV | Only incidental cash |
| FHA Streamline / VA IRRRL | Replaces an existing government loan | None |
| HELOC or home equity loan | Adds a second lien | Yes, keeps your first mortgage |
Lendmire has covered a related question in its piece on getting a cash-out refinance at maximum LTV on a primary home, and a companion article How to Get a Higher LTV on a Cash-Out Refinance: Programs That Go Above the Standard Cap explores programs that go above the standard cap.
Comparing alternatives is worthwhile, and many advisers caution against using cash-out to pay down unsecured debt like credit cards, since it turns unsecured debt into debt secured by your home.
Common Mistakes
1. Reading 80% LTV as 80% of equity in cash.
2. Forgetting that financed closing costs count against the ceiling.
3. Refinancing recently, then applying for cash-out before the 12-month loan-age clock runs.
4. Assuming a cash-out lowers the payment.
5. Skipping a low-appraisal scenario in the planning.
6. Borrowing more than needed. Take what the plan requires, and stop there. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Key Terms Defined
LTV (loan-to-value): The new loan balance divided by the appraised value of the home.
Seasoning: The minimum time a loan or your ownership must exist before a cash-out is allowed.
Limited cash-out refinance: A refinance that pays off the existing loan and costs, with only incidental cash back.
Net tangible benefit: A test on VA and FHA refinances that the borrower gains something real from the new loan.
Delayed financing: A cash-out on a home recently bought with cash.
Frequently Asked Questions
What is the maximum LTV on a cash-out refinance of a primary home?
Eighty percent on a one-unit principal residence under the standard conventional ceiling. Two- to four-unit principal residences, second homes, and investment property carry 75%. A wholesale lane reaches 89.99% with no mortgage insurance for a 680 score and a 50% ratio on a 30-year fixed conforming loan, with six months of seasoning. All figures are subject to lender guidelines and full file review.
Can I do a cash-out right after a refinance?
Usually not. The loan being paid off must be at least 12 months old, counted from note date to note date, and a recent refinance creates a new note. Exceptions exist for special-purpose cases like a co-owner buyout, so ask a loan officer about your facts.
Does VA go higher than 80%?
Yes, VA is the named exception, with a ceiling above conventional, up to full value at the lender’s option. Many lenders set their own limit below that. You will need a Certificate of Eligibility, and the file must pass the net tangible benefit test.
Will a low appraisal change my cash?
Yes. Your payoff does not shrink when value does, so the lower ceiling comes straight out of your cash. A modest miss on value can remove a visible share of the proceeds.
Is a cash-out the same as a streamline?
No. The FHA Streamline and the VA IRRRL give no cash out. They are the no-cash options for borrowers who already hold an FHA or VA loan.
Weighing Your Options
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. As a mortgage broker, it shops wholesale lenders and matches your scenario to the program that fits. Nothing here is a commitment to lend, and every figure is subject to lender guidelines.
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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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
2. Fannie Mae Eligibility Matrix
4. Fannie Mae Selling Guide B2-1.3-03
6. VA News
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 a Payoff Sets a No Cash Out Refinance Loan Amount · How to Choose a Cash-Out Refinance Over a Personal Loan · Delayed Financing vs. a Traditional Cash-Out Refinance for a Cash Buyer
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.