The Quick Read: The best program for you depends on your home, your existing loan and how much equity you want to reach, because the leverage ceiling is set by the loan type and the property. On a one-unit primary home, a standard conventional cash-out tops out at 80% of the appraised value. Two- to four-unit primary homes top out at 75%. One wholesale lane can go higher without mortgage insurance, but only for a narrow set of borrowers, subject to lender guidelines and full file review.
What “Best Program” Actually Means Here
A single winning program does not exist for a conventional cash-out refinance. Fannie Mae and Freddie Mac set the leverage ceiling by occupancy and unit count. Your appraisal, your current liens, your credit and your ratios decide what you actually reach. Lenders then add their own limits on top.
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.
Lendmire is a mortgage broker. It does not lend. It arranges these loans through wholesale lenders and matches the scenario to the program. That is why “best” is a fit question. These are the criteria that matter:
- Leverage ceiling. How much of the home’s value the new loan can cover.
- Net cash. What is left after payoffs, other liens and financed costs.
- Eligibility. Credit score, ratios, seasoning and property type.
- Mortgage insurance. Whether it applies at your leverage.
- Your goal. A small draw, a large draw, or just replacing the loan you have.
Lendmire’s cash-out refinance programs page lays out the program lanes.
Key Takeaways
- A one-unit primary home caps at 80% loan-to-value on a standard conventional cash-out.
- Two- to four-unit primary homes, second homes and investment property cap at 75%.
- The cap covers the whole new loan, so payoffs and financed costs come out of your cash first.
- Two seasoning clocks apply: 12 months on the loan you are paying off and 6 months on title.
- A wholesale lane reaches 89.99% with no mortgage insurance, but it needs a 680 score and a 50% ratio on a thirty-year fixed primary home.
Key Terms Defined
Loan-to-value (LTV): The new loan balance divided by the appraised value of the home.
Cash-out refinance: A new first mortgage that pays off your existing liens and puts the extra equity in your hands.
Limited cash-out (rate-and-term) refinance: A refinance that pays off the existing first mortgage and costs, with only incidental cash back.
Seasoning: The minimum time you have owned the home or held the loan before you can refinance it.
CLTV / HCLTV: Loan-to-value ratios that add other liens on the home, so one cap covers every loan.
Equity: The home’s appraised value minus what you owe against it.
What Are the Conventional LTV Limits by Property Type?
On a one-unit primary home, the conventional cash-out limit is 80% of value. That leaves about 20% equity in the house. The ceiling drops to 75% for two- to four-unit primary homes. Second homes and investment property also sit at 75%.
| Property and occupancy | Cash-out LTV cap |
|---|---|
| One-unit primary home | 80% |
| Two- to four-unit primary home | 75% |
| Second home | 75% |
| Investment property | 75% |
These figures come from the agency Fannie Mae Eligibility Matrix, which separates cash-out limits from limited cash-out limits. The Matrix is updated over time, and lender overlays can sit below it. Treat the agency figure as a ceiling, not a promise.
One more point on occupancy. If you want to pull equity from a second home, the occupancy decides the leverage, and the table above shows the answer.
Manufactured homes follow tighter rules. Fannie Mae’s published product matrix treats cash-out on a manufactured home as more restricted than on a site-built home, and the details have changed over time. Ask a loan officer to confirm the current rule before you count on that equity.
How Is the Loan Sized, Step by Step?
The maximum new loan equals your appraised value times the cap. Then you subtract what the loan has to pay off. What remains is your cash.
1. The appraisal sets the denominator. The cap applies to value as the appraiser reports it, not to what you paid or what a website estimates.
2. The cap covers every lien. CLTV and HCLTV add any second mortgage or home equity line that stays in place. A second lien you keep reduces the cash available.
3. Payoffs come out first. The new loan must retire your current first mortgage and any liens being paid off.
4. Financed costs reduce cash. Closing costs rolled into the loan use up LTV room before cash reaches you.
5. What is left is net cash.
Here is how that plays out in two scenarios, all in percentages of value.
Scenario A: plenty of room. Your home is a one-unit primary residence. You owe 60% of its value on the first mortgage and nothing else. The 80% cap leaves 20% of value of room. Financed costs take a slice of that. The rest is your cash, roughly 15 to 17% of value.
Scenario B: little or no cash. You owe 78% of value on a first mortgage and a second lien. The cap allows 80%. Payoffs and costs eat nearly everything. Little cash comes out, and the loan may not make sense at all.
Appraisal risk matters in both cases. If the value comes in lower than you expected, the cap shrinks with it. The cash you were counting on can shrink even faster, because your balances stay the same.
Lenders may also approve less than the cap allows. The Matrix sets the ceiling. Credit, ratios and the lender’s own rules decide where within it you land.
Cash-Out vs. Limited Cash-Out: Which Do You Need?
If you want to replace your loan and take only incidental cash, limited cash-out reaches higher leverage. If you want real equity in hand, you need a full cash-out and the lower cap. Fannie Mae treats these as separate transactions with separate rules in its Selling Guide.
| Factor | Cash-out | Limited cash-out (rate-and-term) |
|---|---|---|
| Purpose | Take equity as cash | Replace the loan and costs |
| One-unit primary LTV | 80% | 95% |
| Cash back | Any amount, within the cap | Only incidental |
| Seasoning on old loan | 12 months | Different rules apply |
| Mortgage insurance | Not required at 80% or below | Required above 80% |
The decision aid is simple. If you need a small amount of cash, ask whether you need cash at all. Limited cash-out allows only incidental money back. If the amount you want is larger than that, you are in cash-out territory, and the 80% cap is the number to plan around.
What Does Qualification Look Like?
Six checks decide a conventional cash-out refinance on a primary home: occupancy, seasoning, credit, ratios, loan size and the appraisal.
Occupancy. For the 80% cap, the home must be your primary residence.
Seasoning. Two clocks run at the same time. The first mortgage being paid off must be at least 12 months old, measured from note date to note date. At least one borrower must also have been on title for 6 months. The 12-month rule appears in Selling Guide Announcement SEL-2023-01. Freddie Mac applies a similar test in its Guide. Exceptions exist for delayed financing after a cash purchase, inheritance, and legal awards such as a divorce.
Credit and ratios. Across the wholesale conventional programs we place files with, the credit floor starts at a 620 decision score. The automated finding governs most files, with a total ratio ceiling of 50%. Manually underwritten loans use tighter 36% or 45% ratios, with reserve and score factors from the Eligibility Matrix. The Matrix also notes that reserves can apply to automated files with a ratio above 45%.
Credit events. The agencies set waiting periods: four years from a chapter 7 discharge, seven from a foreclosure, and four from a short sale or deed-in-lieu. Shorter periods apply with documented extenuating circumstances.
Loan size. The new loan must fit under the conforming limit for your county. If it does not, jumbo programs take over, with their own credit floors and leverage rules.
Appraisal and property. A property listed for sale when the new loan is disbursed is not eligible for delivery to Fannie Mae.
Every figure here is subject to lender guidelines and full file review. Nothing here is a commitment to lend.
Where the General Rule Breaks
Some situations bend the rules above. These are the ones borrowers run into most.
A home with no mortgage. Many owners assume a paid-off home is not a refinance. Fannie Mae’s Selling Guide on cash-out refinance transactions treats a new loan on a lien-free property as a cash-out. The 80% cap and the pricing that goes with cash-out both apply.
Paying off student loans. The extra pricing charge for cash-out is waived when proceeds pay off eligible student loans. The standard leverage limits still apply, and the amount of cash back is restricted.
A co-owner or divorce buyout. Freddie Mac describes a special-purpose cash-out refinance that lets one owner buy out another’s equity, and says its credit fee in price is not billed on those loans. How a buyout is treated can differ between the two agencies, so the structure matters.
Features that block a loan. Older Selling Guide versions made a temporary interest buydown, certain energy-improvement financing, and paying off an installment land contract ineligible on a cash-out. Treat those as examples. The current guide governs.
Texas. A cash-out on a Texas homestead is capped at 80% of the home’s value by the state constitution. The 89.99% wholesale lane below is not written there.
Renovation loans. A renovation loan may not offer a cash-out option on a primary home. Ask before you assume it does.
Is There a Higher-Leverage Lane With No Mortgage Insurance?
Yes, in one narrow case. Across the wholesale programs we place files with, one lane reaches 89.99% LTV with no mortgage insurance. It has tight conditions. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
- A 680 decision score.
- A 50% total ratio ceiling.
- A thirty-year fixed rate.
- A primary residence.
- A conforming loan balance.
- Its own six months of seasoning.
Compare that with the standard cap. A standard cash-out stops at 80%, which is also the level where mortgage insurance falls away. Above 80%, conventional mortgage insurance applies, except in that one wholesale no-MI lane. You can request cancellation at 80% of the original value, with a good payment history, no subordinate liens and no decline in value. The servicer must terminate it automatically at 78% under the Homeowners Protection Act.
The higher lane is a fit for a borrower with strong credit who needs more equity than the 80% cap reaches. It is a poor fit for someone near a score or ratio limit, or for a borrower in Texas. For many homeowners, the standard cap is the real planning number.
What If You Fall Short of the Cap?
Falling short usually means the numbers leave less cash than you hoped for. You have a handful of ways to respond.
| Situation | Option |
|---|---|
| Value came in low | Wait for value to grow, or take a smaller draw |
| Balance too high for the cap | Pay down principal, then refinance |
| Need only a small amount | Check whether a limited cash-out fits |
| Still within seasoning clocks | Wait until both clocks are met |
| Cash-out does not pencil | Consider keeping the loan you have |
There is also a cost question. Cash-out carries price adjustments based on leverage band and credit score, which Fannie Mae calls loan-level price adjustments. Freddie Mac has a similar fee in price. Because the loan is larger, the pricing is usually higher than on a rate-and-term refinance. A broker can compare how different wholesale lenders handle that, but the effect is built into the loan, not added as a separate line you can avoid.
What Does Cash-Out Do to Your Finances?
A cash-out refinance replaces your current loan, so you are comparing whole loans, not just the cash. The new loan is larger, the term may be longer and the payment may rise. Your home is also the collateral for the added debt.
The CFPB’s Office of Research blog on cash-out refinances notes the added risk for borrowers. For research purposes, the bureau counts a refinance as cash-out when the new loan plus junior liens is more than 5% larger than the prior loans and junior liens. That is a research definition, not an underwriting rule. The CFPB has also found that credit scores tend to improve right after a cash-out refinance and then slip back over time.
A cash-out works best when the money has a clear job, such as paying off higher-cost debt you will not run back up.
Common Mistakes
- Assuming 80% of value arrives as cash. The cap covers the whole new loan, so payoffs and costs come out first.
- Treating the Matrix number as the number you will get. A lender’s limit can sit below the agency ceiling.
- Ignoring the second clock. The loan being paid off must be 12 months old, even if you have owned the home far longer.
- Rolling costs in without checking the effect. Financed costs use LTV room before cash reaches you.
- Comparing only the cash. Look at the whole replacement loan, not just the amount you receive.
Next Step
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. A broker that shops several wholesale lenders can match your property, credit and leverage need to the program that fits. Program figures are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
Frequently Asked Questions
How much equity can I take out of a primary home with a conventional loan?
The new loan can reach 80% of the appraised value on a one-unit primary home, and 75% on a two- to four-unit primary home. Your cash is that maximum minus your payoffs, other liens and financed costs. Lender limits can sit lower than the agency ceiling.
Do I need mortgage insurance on a cash-out refinance at the cap?
A standard cash-out at 80% or below does not carry conventional mortgage insurance, because insurance applies above 80% LTV, except in the one wholesale no-MI lane. If you use a higher-leverage lane, the terms differ. Where insurance does apply, you can request cancellation at 80% of the original value, and it ends automatically at 78%. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
How long do I have to wait before I can do a cash-out refinance?
Two clocks apply. The first mortgage you are paying off must be at least 12 months old, and at least one borrower must have been on title for 6 months. Exceptions cover delayed financing after a cash purchase, inheritance and legal awards.
Is a limited cash-out refinance better than a cash-out?
It depends on whether you need cash. A limited cash-out reaches 95% LTV on a one-unit primary home but allows only incidental cash back. If you want real equity in hand, cash-out and its 80% cap is the product you need. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Can the lender approve less than the maximum?
Yes. The agency figure is a ceiling. Credit score, ratios, reserves, the appraisal and each lender’s own rules decide the amount. That is one reason a broker that compares several wholesale lenders can be useful.
For your own numbers, request a scenario review with Lendmire.
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.
For the program’s current guidelines, see conventional loan programs.
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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
1. Fannie Mae Eligibility Matrix
2. Fannie Mae Selling Guide Announcement SEL-2023-01
3. Fannie Mae Selling Guide: Cash-Out Refinance Transactions
4. Freddie Mac Cash-Out Refinance
5. CFPB Office of Research: A Look at Cash-Out Refinance Mortgages
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Best Cash-Out Refinance Program After Six Months of Ownership Seasoning on a Conventional · Best Cash-Out Refinance Program to Remove PMI From the Mortgage · Best Cash-Out Refinance Program When Moving Into a Conventional Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.