The Quick Read: No, not on a standard agency (Fannie Mae or Freddie Mac) loan. The cap is 80% loan-to-value on a one-unit primary residence and 75% on two- to four-unit homes, second homes and investment property. Credit score and income do not move it. One wholesale lane reaches 89.99% with no mortgage insurance, but it has tight conditions. Products that look higher, like a limited cash-out refinance, don’t pay out real cash.
What Does the Cap Actually Limit?
The cap limits your new total loan, not the cash you receive. Loan-to-value (LTV) is your new loan divided by the appraised value of the home. At 80%, the new loan can’t exceed four-fifths of that value.
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.
Your cash is what’s left after the new loan pays off your current mortgage and any financed closing costs. Think of a home where the current mortgage equals 50% of the appraised value. An 80% cap leaves 30% of the value as potential cash, before costs. Not 80%. Not your full equity.
That’s the misconception I hear most. Borrowers assume the cap is a share of their equity. It’s a share of the home’s value, and your payoff comes out of it first.
The rules for these loans sit in Fannie Mae’s Selling Guide, topic B2-1.3-03. That page sends readers to the Eligibility Matrix for the actual ratios. Lendmire’s cash-out refinance programs page covers how these loans are arranged through wholesale lenders.
Why Is the Cap a Hard Stop?
Because the agencies set it, not the loan officer. Fannie Mae and Freddie Mac publish maximum LTVs, and a lender selling loans to them must stay inside those limits. A broker can’t write an exception on a loan that has to meet them.
Credit still matters, just not for the cap. Fannie Mae’s guide notes that a loan-level price adjustment applies to certain cash-out refinances, based on LTV and credit score. A strong score can improve your pricing. It does not raise the ceiling.
A lender can be stricter than the agencies. It can’t be looser on an agency loan.
How Does the Cap Change by Property Type?
Occupancy and unit count set the leverage. A cash-out can be written on a primary residence, a second home or an investment property, but the cap differs.
| Property | Max LTV, conventional cash-out |
|---|---|
| One-unit primary residence | 80% |
| Two- to four-unit primary residence | 75% |
| Second home | 75% |
| Investment property | 75% |
Texas adds its own rule. A cash-out on a homestead there (a Section 50(a)(6) loan) is capped at 80% of the home’s value by the state constitution. That is a state limit, not an agency one, and the wholesale no-MI lane described below isn’t written in Texas.
Subject to lender guidelines and full file review, those are the figures I work with across the wholesale programs I place files with.
What Is the One Route Above 80%?
There is exactly one, and it’s narrow. A wholesale lane reaches 89.99% LTV with no mortgage insurance. It requires a 680 score, a 50% total ratio ceiling, a thirty-year fixed rate, a primary residence and a conforming loan balance. It carries its own six months of seasoning. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Mortgage insurance is normally required above 80% LTV on the agency path, with this lane as the exception. Where it applies, the borrower can request cancellation at 80% of the original value, and the servicer must end it automatically at 78% under the Homeowners Protection Act. Lendmire’s conventional program sheet lists typical annual premiums of 0.58% to 1.86% of the balance. That’s the program sheet’s range, not a quote.
Why doesn’t everyone use it? The conditions rule out second homes, investment property, jumbo balances and Texas homesteads. It also isn’t a loophole in the agency cap. It’s a separate wholesale product with its own guidelines.
Does a Limited Cash-Out Refinance Go Higher?
It allows higher leverage, but it isn’t a cash-out. A limited cash-out (also called rate-and-term) refinance pays off your first mortgage, closing costs and any purchase-money second lien. Cash back is only incidental.
The leverage reaches 95% on a one-unit primary residence, or 97% where the existing loan is agency-owned and the first-time-buyer program allows. Mortgage insurance applies above 80% on the agency path; the wholesale lane that reaches 89.99% LTV carries no mortgage insurance. The incidental cash is small: Fannie Mae allows the lesser of 2% of the new loan amount or $2,000, while Freddie Mac allows the greater of 1% of the new loan amount or $2,000. Fannie Mae’s older guide version shows how that cash-back limit has been written before, so the current rule is worth confirming with the lender.
Buying out a co-owner under a written agreement is also a limited cash-out transaction at both agencies. That’s a use for it, not a way to pull equity.
Take cash beyond the incidental amount and the loan gets reclassified as cash-out. Then the 80% cap applies.
Which Other Options Reach Different Leverage?
Other programs follow their own rules. The government streamlines aren’t cash-out products either.
| Option | What it does | Main catch |
|---|---|---|
| Conventional cash-out | Real cash, 80% on one-unit primary | Cap can’t be exceeded |
| Wholesale no-MI lane | Up to 89.99% LTV, no MI | 680 score, primary, 30-year fixed, conforming |
| Limited cash-out | 95% to 97% on one-unit primary | Only incidental cash back |
| FHA Streamline | Existing FHA loan, no appraisal | No cash out, net tangible benefit |
| VA IRRRL | Existing VA loan, 0.5% funding fee unless exempt | No cash out, seasoning applies |
Above the conforming loan limit, jumbo lanes take over. They carry a 660 decision score, leverage to 90%, loans to $5,000,000 and a 50% ratio ceiling on the fixed lanes. Loan size can reverse the logic: “above the cap” there means a different cap, set by a different lender’s guidelines.
What Else Can Stop You Before the Cap Does?
Several rules bite earlier. Check these first.
- Seasoning. The first mortgage being paid off must be at least 12 months old, note date to note date. You must have been on title for 6 months. Delayed financing, inheritance and legal-award exceptions exist.
- Credit and ratios. 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 run at 36% or 45%, depending on score and reserve factors.
- Credit events. The agencies require four years after a chapter 7 discharge, seven after a foreclosure, and four after a short sale or deed-in-lieu. Documented extenuating circumstances can shorten these.
- Appraisal. Value is the denominator. A lower appraisal shrinks your maximum loan and your cash together.
- Ineligible features. Fannie Mae’s current guide lists HomeStyle Refresh transactions as ineligible for cash-out treatment.
One appraisal case shows the stakes. Say a home you expected at one value appraises 5% lower. At an 80% cap, the maximum loan drops by 4% of the original expected value. Your payoff doesn’t change, so that entire drop comes out of your cash.
How Can You Get More Cash Without Breaking the Cap?
You can’t raise the ceiling, but you can use the room better.
1. Skip financing the closing costs. Costs rolled into the loan use up room under the cap. Paying them separately leaves more cash.
2. Pay down the existing balance first, if possible. Counterintuitive, but it only helps if you’d otherwise face seasoning or LTV issues.
3. Plan around the appraisal. Document improvements and recent upgrades so the appraiser sees them.
4. Check seasoning dates. If you’re close to the 12-month or 6-month mark, waiting can open the door.
5. Check the no-MI lane. If you have a primary residence, a 680 score and a conforming balance, ask whether it fits.
6. Ask for the cash you need. Taking less than the maximum lowers your balance and your risk.
A higher LTV also changes pricing through the loan-level price adjustment. Your Loan Estimate shows the terms, and comparing them across lenders is the real test.
Should You Borrow to the Maximum?
Usually not. At 80% LTV you keep only 20% equity, and a modest drop in home value narrows that fast. You’d also carry a larger balance for the full term.
The stronger play might be borrowing what the project or payoff needs and stopping there. A borrower funding a renovation that adds value can reasonably use more room. A borrower covering ongoing spending shouldn’t. It’s a toss-up for debt consolidation, and it depends on whether the spending habits that created the debt have changed.
Key Terms Defined
- LTV (loan-to-value): your loan amount divided by the home’s appraised value.
- Cash-out refinance: a new mortgage larger than your payoff, with the difference paid to you.
- Limited cash-out refinance: a refinance that pays off your mortgage and costs, with only small cash back.
- Seasoning: the waiting period a lender requires after a loan or ownership begins.
- Loan-level price adjustment (LLPA): a pricing charge from Fannie Mae based on factors like LTV and credit score.
Frequently Asked Questions
Can I cash out 100% of my equity?
No. The cap sets a ceiling on the new total loan, and your payoff and financed costs come out of it first. At 80% LTV on a one-unit primary residence, at least 20% of the value stays in the home. The wholesale no-MI lane reaches 89.99%, still short of 100%. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Can a loan officer make an exception to the cap?
Not on an agency loan. The agencies set the maximum, and a lender selling to them must follow it. A lender can set tighter limits of its own, but not looser ones. Be cautious of any claim that a standard conventional cash-out will go higher.
Does the cap apply if I’m refinancing a second home?
Yes, and it’s lower. A conventional cash-out on a second home is capped at 75% LTV, the same as two- to four-unit primary residences and investment property. Occupancy decides the leverage. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
What if my appraisal comes in low?
Your cash shrinks. The maximum loan equals the cap times the appraised value, so a lower value cuts the loan, and your payoff stays the same. The whole reduction comes out of your cash. Some borrowers wait and reapply, while others take a smaller amount.
How long must I wait before a cash-out refinance?
The first mortgage being paid off must be at least 12 months old, and you must have been on title for 6 months. Exceptions exist for delayed financing, inheritance and legal awards. The no-MI wholesale lane carries its own six months of seasoning. All of this is subject to lender guidelines and full file review.
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. Nothing here is a commitment to lend.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. 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 Selling Guide, B2-1.3-03 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: Best Cash-Out Refinance Program When Moving Into a Conventional Loan · Best Cash-Out Refinance Program When Conventional Seasoning Rules Limit Your Timing · Best Cash-Out Refinance Program on an Existing Homeready Mortgage
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.