The Quick Read: Yes, once the mortgage you are paying off is at least 12 months old, counted from note date to note date, and one borrower has been on title for six months. The 12 months measure the age of the loan, not how long you have owned the home. Clearing seasoning only opens the door to full file review.
What Does “12-Month Seasoning” Actually Mean?
Seasoning is the waiting period a lender wants between two events. For a conventional cash-out refinance, those events are the signing of your current first mortgage and the signing of the new one.
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 date that matters is the note date. That is the date you signed the promissory note on the loan, and it is printed on your closing documents and shown on your credit report.
Fannie Mae’s Selling Guide Announcement SEL-2023-01 requires any existing first mortgage paid off by a cash-out refinance to be at least 12 months old. The count runs from the note date of the old loan to the note date of the new one. Freddie Mac has the same concept. Its cash-out refinance section says the first lien must be seasoned 12 months between the two note dates, and the file must document it. A credit report or title commitment usually does the job.
Here is the part that trips people up. “Twelve months of ownership” is a common shorthand, and it is wrong. You can own a home for eight years and still be blocked if you refinanced it last spring. You can also own a home for ten months, with a loan that is not yet a year old, and be blocked for a different reason. The loan’s age is the test.
The Two Clocks You Have to Clear
A conventional cash-out refinance runs on two separate clocks. Most borrowers hear about one and get surprised by the other.
| Clock | What it measures | Length |
|---|---|---|
| Loan age | Existing first mortgage, note date to note date | 12 months |
| Time on title | At least one borrower owning the home | 6 months |
Fannie Mae’s cash-out refinance section measures the title period to the disbursement date. Freddie Mac measures it to the note date. The difference is small, but it explains why two lenders can give you slightly different answers on the same file.
The practical result depends on how you bought. Someone who financed the purchase clears the six-month title test early. They usually wait on the 12-month loan-age test. Someone whose mortgage is already well past 12 months is not blocked by seasoning at all.
Appreciation does not shorten either clock. The loan-age test counts note dates and ignores what the home is worth today. A home that gained value fast still waits.
Three Timelines, Worked Out
These examples use months, not dollars. They show how the clocks interact.
The financed buyer. You buy a home with a mortgage. Your note date is month zero. At month six you pass the title test. At month 12 the loan is old enough. The earliest cash-out note date is month 12, assuming you have the equity and the file qualifies. Apply at month eight and the answer is no, even though your title clock is done.
The recent refinancer. You owned your home for years, then did a no-cash refinance at month 20 of this loan. That refinance created a new note. The 12-month clock restarted. A cash-out now needs the new loan to be 12 months old. Your years of ownership do not count toward it.
The long-time owner. You bought the home many years ago and have not refinanced since. Your existing loan is far past 12 months. Seasoning is a non-issue. Your questions are equity, credit, and ratios.
Run those three before you call anyone. It takes two minutes with your closing papers.
Does Refinancing Reset the Clock?
Yes, a new first mortgage carries a new note date. That follows from the note-date-to-note-date rule.
This catches people who refinance for a different reason and later want cash. A rate-and-term refinance (a refinance that pays off your loan and closing costs without giving you meaningful cash back) makes a new loan. If you think you might want cash from your equity within the next year, that refinance can push the cash-out date out.
A recent modification can do the same thing. If a modification created a new note date, some lenders start the count from that date. Ask the lender how it treats yours, because the rules on modifications vary by file.
The test is about the first mortgage. How a lender treats a second-lien payoff is a separate question worth asking up front.
The Exceptions
The general answer breaks down in a handful of situations.
Cash buyers (delayed financing). If you paid cash, there is no first mortgage to season, so the 12-month test does not come into play. Fannie Mae’s guide includes a delayed financing exception for arm’s-length cash purchases. You document where the purchase money came from. If an unsecured loan or a loan on another asset funded the purchase, the settlement statement must show the cash-out proceeds paying that loan off or down. It is still priced as a cash-out loan.
Inheritance or a legal award. Freddie Mac exempts a borrower who inherited the property or was awarded it by a final judgment, such as in a divorce. The six-month title wait does not hold those borrowers back.
LLC or LP title. Freddie Mac lets time held in the name of an LLC or LP count toward the six months, subject to conditions.
Co-owner buyouts. Buying out a co-owner under a written agreement is handled as a limited cash-out transaction at both agencies. It is not treated like an ordinary cash-out, so the seasoning gate looks different.
These are narrow lanes. A lender has to see documents that fit them. If you think you qualify, say so at the start so the file is built around the right path.
What About the 89.99% No-Mortgage-Insurance Lane?
Across the wholesale programs Lendmire places files with, one cash-out lane reaches 89.99% loan-to-value with no mortgage insurance. It requires a 680 score and a 50% ratio on a 30-year fixed loan. It is limited to a primary residence with a conforming loan balance. It carries its own six-month seasoning requirement. Exact terms depend on lender and investor guidelines, credit profile, reserves, and property review.
That is the one exception to the usual rule that mortgage insurance applies above 80% loan-to-value. LTV, or loan-to-value, is the new loan as a percentage of the home’s appraised value. Ask how seasoning is measured on your file before you count on this lane. In Texas, a cash-out on a homestead is capped at 80% of the home’s value by the state constitution, and this wholesale lane is not written there.
Passing Seasoning Is Not the Same as Approval
Seasoning is a gate. It is not a verdict. Once you clear it, the lender still reviews the whole file.
Here is what the review covers:
- Equity. The appraised value sets the maximum loan. On a one-unit primary residence, a conventional cash-out tops out at 80% LTV. Two- to four-unit primary residences, second homes, and investment property top out at 75%. Occupancy sets the leverage.
- Credit. The wholesale conventional programs Lendmire works with start at a 620 decision score. The automated underwriting finding governs most files.
- Ratios. The total ratio ceiling is 50% on an automated approval. Manually underwritten loans use 36% or 45%, with reserve and score factors.
- Reserves. On a Fannie Mae automated file where the debt-to-income ratio exceeds 45%, six months of reserves are required.
- Payment history. A recent late payment on the loan you are paying off draws attention.
Debt-to-income, or DTI, is your monthly debt payments divided by your gross monthly income. A cash-out loan is bigger than your current balance, so your payment goes up. Underwriters run the numbers on the new loan, not the old one.
One more note. Fannie Mae’s guide changes from time to time, and the section cited here carried a late-year revision date when reviewed. Confirm the current version with your loan officer.
If You Are Inside the Window
Say you fail the loan-age test by a few months. You have options, and each has tradeoffs.
| Option | What it does | Tradeoff |
|---|---|---|
| Wait | Lets the loan season | Costs nothing, uses no equity |
| Rate-and-term refinance | New loan, minimal cash back | Restarts the 12-month clock |
| Second lien or home equity line | Taps equity separately | A separate loan with its own terms |
| Delayed financing | Cash purchases only | Needs documented source of funds |
The rate-and-term route deserves a warning. It is a limited cash-out refinance, which is a separate transaction type in Fannie Mae’s guide. Cash back is capped at incidental amounts. Fannie Mae sets it at the lesser of 2% of the new loan amount or $2,000. Freddie Mac sets it at the greater of 1% of the new loan amount or $2,000. A refinance with no meaningful cash back is not a cash-out. Do not assume it is.
And if you are still inside the window, the programs worth a look while you wait are covered in Lendmire’s comparison of cash-out options before the 12-month ownership period is met.
If you want to see how the programs line up on leverage and seasoning, Lendmire’s cash-out refinance programs page lays them out.
What Does a Cash-Out Cost?
A cash-out refinance is a brand-new mortgage. It carries closing costs, which are the upfront charges to get the loan and transfer ownership. The Loan Estimate shows your estimated closing costs and your estimated cash to close. Read it line by line.
Cash-out transactions also carry cash-out pricing. Fannie Mae says so directly, even for the delayed financing exception. You can pay costs out of pocket or roll them into the loan. Rolling them in reduces the net cash you walk away with.
Also think about what the cash is for. Moving short-term debt into a long-term mortgage changes how much you pay over time, even when the monthly budget looks easier. Run that tradeoff before you sign.
Mistakes to Avoid
- Counting from the wrong date. Count from the note date on the closing papers. Do not count from the day you moved in or the day you got the keys.
- Mixing up the clocks. Passing the six-month title test does not pass the 12-month loan-age test.
- Refinancing without cash back, then expecting a cash-out. The new note restarts the count.
- Assuming a cash buyer is exempt from everything. Delayed financing has documentation rules, and the loan is still priced as cash-out.
- Trusting a flat “12 months of ownership” answer. Some sources flatten the rule that way. The agency guides do not.
- Assuming seasoning means approval. Equity, credit, ratios, reserves, and the appraisal still decide the outcome.
Key Terms Defined
Seasoning: The waiting period a lender wants between two events, here the age of your existing first mortgage.
Note date: The date you signed the promissory note on a loan.
Time on title: How long a borrower has been the legal owner of the home.
Cash-out refinance: A new, larger mortgage that pays off the old one and gives you the difference in cash.
Limited cash-out refinance: A refinance that pays off your loan and costs with only small cash back.
Delayed financing: An exception that lets a cash buyer take out a cash-out loan without waiting out the usual title period.
LTV (loan-to-value): The loan amount as a percentage of the home’s appraised value.
Frequently Asked Questions
How soon after buying a home can I do a cash-out refinance?
Usually at the 12-month mark if you financed the purchase, because the loan you are paying off must be 12 months old. The six-month title test clears sooner. If you paid cash, you may be able to use delayed financing and skip the wait, with documentation.
Does a rate-and-term refinance restart the 12-month clock?
Yes. A new first mortgage has a new note date, and the 12 months run from that date. If cash from your equity is on your near-term list, a no-cash refinance now can delay it.
If I paid cash for my home, do I face the 12-month test?
No, because there is no first mortgage to season. The question becomes the title test or the delayed financing exception. Delayed financing needs an arm’s-length purchase and documented source of funds, and it is priced as a cash-out loan.
Do Fannie Mae and Freddie Mac count the dates the same way?
Close, but not identical. Both use a 12-month loan-age test measured note date to note date. Fannie Mae measures the six-month title period to disbursement, while Freddie Mac measures it to the note date. Their exceptions are also worded differently, and lenders may add their own overlays.
What if I clear seasoning and still get declined?
It happens, and the reason is usually equity, credit, ratios, or reserves. On a one-unit primary residence the cap is 80% LTV, so a home without enough equity does not work. Ask the loan officer which item fell short. You can often fix it with time or a smaller loan amount.
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.
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 Announcement SEL-2023-01
2. Freddie Mac Seller/Servicer Guide 4301.5, Cash-out refinance Mortgages
3. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
4. Fannie Mae Selling Guide B2-1.3-02, Limited Cash-Out Refinance Transactions
5. Consumer Financial Protection Bureau, Loan Estimate explainer
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 Without PMI on a Conventional Loan · Can You Use a Conventional Cash-Out Refinance Right After a Rehab? · Can a Conventional Cash-Out Refinance Go Above the Standard Cap?
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.