The Quick Read: A file near the minimum score gets approved or declined on the combination of score, leverage, and debt ratio, not on the score alone. Across the wholesale programs Lendmire places files with, conventional cash-out starts at a 620 decision score, with a 50% total ratio ceiling on automated findings. Cash-out leverage tops out at 80% on a one-unit primary residence. Every figure here is subject to lender guidelines and full file review, and none of it is a commitment to lend.
What Does “Minimum Credit Score” Actually Mean Here?
There is no single national minimum for a conventional cash-out. The floor depends on how the file is underwritten, how much of the home’s value you borrow, and what the individual lender adds 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: 7.18% as of November 5, 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.
Think of the score as one gate among several. The wholesale conventional programs I work with start at a 620 decision score. Manually underwritten adjustable-rate loans start at 640. That is where the program begins, not where every file gets approved.
Fannie Mae removed the hard minimum score from its automated system for new loan files. That is a real change, but it does not mean credit no longer matters. Lenders must still pull scores for every borrower, the automated system still weighs credit risk, and lenders and mortgage insurers can keep their own minimums. Plenty of borrowers read the headline and assume a 560 score now works. Usually not.
The “decision score” is the score the lender uses to judge eligibility. With a tri-merge credit report (all three bureaus), lenders generally take the middle score for each borrower. When two borrowers are on the loan, the lower of their representative scores typically drives the decision. Pricing can use a different score than eligibility does, so ask your broker which one applies to your file.
If you are weighing the product itself, Lendmire’s cash-out refinance programs page lays out the options.
How Is the File Underwritten, Step by Step?
Underwriting a cash-out refinance runs in a fixed sequence: eligibility clocks, credit pull, automated findings, property and leverage, income and ratios, reserves, then conditions. A near-floor file gets scrutiny at every step.
1. Eligibility screen. Before anyone looks at your score, the clocks get checked. The mortgage being paid off must be at least 12 months old, measured note date to note date, per Fannie Mae’s cash-out seasoning notice. A borrower must also have been on title for 6 months, with exceptions for delayed financing, inheritance, and legal awards.
2. Credit pull. The lender orders scores and tradelines for every borrower. This is the step that sets your decision score.
3. Automated findings. The file runs through the agency’s automated system. It weighs credit, income, assets, and loan features together, so a strong asset picture can offset a thin score, and the reverse is also true. For most loans, the automated finding is the one that governs.
4. Property and leverage. An appraisal sets the value. Leverage is the new loan divided by that value. Cash-out caps at 80% on a one-unit primary residence and 75% on two- to four-unit homes, second homes, and investment property. Occupancy sets the leverage.
5. Income and ratios. The lender totals your monthly debts, including the new mortgage, and divides by income. Automated findings allow a total ratio up to 50%. Manual underwriting uses 36% or 45%, depending on the reserve and score factors in the Eligibility Matrix.
6. Reserves. Reserves are cash or liquid assets left after closing. Per the Fannie Mae Eligibility Matrix, reserves apply on automated cash-out files when the ratio is above 45%.
7. Conditions and clear to close. The lender documents payoffs, title, occupancy, and seasoning, and asks for anything missing.
What Does Each Test Check, and What Fails It?
Each underwriting test has a specific trigger. Knowing them lets you spot problems early, and several can be fixed before you apply.
| Test | What it checks | Common failure |
|---|---|---|
| Seasoning | Loan age and time on title | Cashing out too soon |
| Credit | Decision score and history | Score under program or lender floor |
| Leverage | New loan vs. value | Appraisal lands short of the target |
| Ratio | Debts vs. income | Total over 50% (automated) |
| Reserves | Post-closing liquid assets | Ratio above 45% with little cash |
| Occupancy | How the home is used | Documents don’t match the stated use |
The fixable ones: paying down a card before the credit pull, asking for a lower loan amount if the appraisal comes in light, or waiting out a seasoning clock. A thin score is the hardest to change on short notice.
Why Can a Lender Be Stricter Than the Agency?
A lender overlay is any rule a lender adds on top of the agency’s minimum. Lenders and mortgage insurers can do this because they carry the risk of buying back or insuring loans that go bad.
So two lenders can see the same 620 file and answer differently. That is the practical reason a broker matters. Lendmire shops a multi-state network of wholesale cash-out refinance lenders and matches the scenario to the program that fits. The right program for your situation depends on your score, leverage need, ratio, and occupancy. Some lenders set a higher floor on cash-out than on a purchase. Others price low scores harshly enough that the loan stops making sense.
Pricing is the second half of the story. The agencies add a loan-level price adjustment or a credit fee on cash-out loans, driven by score and leverage. Lower scores and higher leverage cost more. Freddie Mac’s cash-out product page still cites a 620 minimum indicator score unless its guide says otherwise, so “no floor” is not accurate there. At the lowest scores, the cost can matter more than the approval.
What Does Mortgage Insurance Do on a Cash-Out?
Mortgage insurance is a policy that protects the lender when you borrow a large share of the home’s value. On the agency path it is required above 80% leverage, though one wholesale lane, the no-mortgage-insurance cash-out lane, is an exception. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Conventional cash-out leverage stops at 80% on a one-unit primary residence, so a standard cash-out stays at or below the point where mortgage insurance applies. The wholesale lane runs the other direction: it reaches 89.99% leverage with no mortgage insurance. It requires a 680 score, a 50% ratio, a thirty-year fixed rate, a primary residence, a conforming loan balance, and its own six months of seasoning. A file at the minimum 620 score does not fit that lane. Texas homestead cash-outs are capped at 80% of value by the state constitution, and that wholesale lane is not written there. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Where Does the General Rule Break?
The usual sequence bends in a handful of named situations. Each one changes the leverage, the pricing, or whether cash-out is even the right label.
- Co-owner buyout. Buying out someone’s interest under a written agreement is treated as limited cash-out, not cash-out, when the property was jointly owned for at least 12 months, per the Fannie Mae Selling Guide. Freddie Mac does not bill its cash-out credit fee on these special purpose loans.
- Free-and-clear home. A new loan on a paid-off home is still cash-out under Freddie Mac.
- Delayed financing. If you bought with cash, an exception to the seasoning clock may let you borrow against the home soon after.
- Student loan payoff. Fannie Mae waives the cash-out price adjustment when proceeds pay eligible student loans, then charges the limited cash-out adjustment. Standard cash-out leverage limits still apply.
- Energy-improvement (PACE) loans. A PACE obligation generally has to be paid off in the transaction.
- No usable credit score. Under Freddie Mac’s rules, borrowers without scores are limited to purchase or no-cash-out refinances.
- Affordable programs. HomeReady and Home Possible carry an income limit of 80% of area median income, and their cash-out options are narrow. Fannie Mae’s HomeReady matrix covers purchase and limited cash-out only.
- 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. Documented extenuating circumstances can shorten them.
What Do Two Files Near the Floor Look Like?
Two files with the same score can end differently. Ratio, reserves, and leverage decide it. These are hypothetical, with no dollar figures.
| Factor | File A | File B |
|---|---|---|
| Decision score | 620 | 620 |
| Leverage requested | 80% | 70% |
| Total ratio | 49% | 38% |
| Reserves | Thin | Several months |
| Likely read | Tight, may need changes | Stronger file |
File A sits at the edge on three tests at once. A lender might ask for less cash out, a debt paid off before closing, or more reserves. File B has room, so the low score is the only weak spot. Same score, different outcome. This is the interaction the individual rows hide.
Other surprises can still derail a file, such as a late-appearing collection, a seasoning date counted from the wrong event, or an appraisal that lands short. Ask for a full file review before you pay for an appraisal.
What If Your Score Is Below the Floor?
Below a program’s floor, cash-out is usually off the table until the score moves. A few paths exist, and some of them are not cash-out at all.
- Raise the score first. Paying down revolving balances before the credit pull is often the fastest lever. Disputing real errors helps too.
- Try a rate-and-term refinance. A limited cash-out refinance allows only incidental cash back (Fannie Mae: the lesser of 2% of the new loan amount or $2,000; Freddie Mac: the greater of 1% or $2,000). It can reach 95% leverage on a one-unit primary residence, with mortgage insurance above 80%.
- Consider government streamlines. If your current loan is FHA or VA, the FHA Streamline and VA IRRRL have limited credit review.
- Use the cash for the right reason. The Consumer Financial Protection Bureau (CFPB) reports that borrowers most often cash out to pay off other debts. Moving unsecured debt onto your home raises the stakes if payments are missed, and a cash-out can lengthen your payoff time, per the CFPB’s home equity guide.
Key Terms Defined
Decision score: The credit score the lender uses to judge whether your loan is eligible.
Loan-to-value (LTV): The new loan amount divided by the home’s appraised value.
Total ratio (DTI): Your monthly debts, including the new mortgage, divided by your gross monthly income.
Reserves: Cash or liquid assets you still have after closing.
Seasoning: The required age of your existing loan and your time on title before you can cash out.
Overlay: A rule a lender adds beyond the agency minimum.
Loan-level price adjustment: A charge built into pricing based on score and leverage.
Frequently Asked Questions
Did Fannie Mae and Freddie Mac eliminate credit score requirements?
No. Fannie Mae removed the hard minimum from its automated system, but lenders must still pull scores, the system still analyzes credit risk, and manual underwriting still follows the Eligibility Matrix. Lenders and mortgage insurers can keep stricter minimums, and Freddie Mac’s cash-out page still cites 620.
Does a 620 score get me the same terms as a 740?
Typically not. The 620 can be eligible on a wholesale conventional program, but score and leverage drive pricing, so the lower score generally costs more. It also leaves less room if your ratio or reserves are thin.
Which score does the lender use if two of us are on the loan?
Lenders pull scores for each borrower and generally use the middle score per person. The lower representative score typically drives eligibility. Pricing may use a different score, so ask which one applies.
Can I cash out soon after buying my home?
Usually not. The loan being paid off must be at least 12 months old, and a borrower must have been on title for 6 months. Delayed financing, inheritance, and legal-award exceptions exist.
Is a rate-and-term refinance easier at a low score?
Often, yes, because leverage can run higher and only incidental cash comes back. You still need to meet the lender’s score floor and ratio limits, subject to lender guidelines and full file review.
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.
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.
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 cash-out seasoning notice
2. Fannie Mae Eligibility Matrix
3. Freddie Mac cash-out refinance product page
4. Fannie Mae Selling Guide, limited cash-out refinance transactions
5. CFPB, Using Home Equity guide
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 Lenders Size a Conventional Cash-Out Refinance on a Primary Home · Can You Do a Conventional Cash-Out Refinance Before Seasoning Ends? · How a Conventional Cash-Out Refinance Works for a First-Timer
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
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.