The Quick Read: Fannie Mae will not lend to an LLC, so the cash-out limit on an LLC-held rental only applies after the deed moves into your personal name, and then the cap is 75% loan-to-value on a cash-out refinance of a one-unit investment property, lower for two-to-four units, and net cash is whatever remains after payoffs and costs.
- The borrower must be an individual. The LLC cannot sign the note.
- Title has to leave the LLC before the refinance closes.
- The cap is set by occupancy and unit count, not by the entity.
- You are reviewed on your personal income and debt ratios, not on the rent alone.
- If you want the LLC to stay on title, a DSCR cash-out loan is a different route, subject to lender program eligibility.
Why Fannie Mae and an LLC Don’t Mix
Fannie Mae buys loans made to people, not companies. Its Selling Guide section on borrower eligibility lists individuals and certain trusts as eligible borrowers. Land trusts are allowed only on a negotiated basis, in states where they are widely accepted. The borrower must also take title and sign both the note and the security instrument personally.
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So the question “how much can I pull out of my LLC’s rental” has an awkward first answer: the LLC can’t be the borrower at all. The cash-out refinance rules say ownership must transfer out of the LLC and into the individual borrower’s name to close.
The entity doesn’t change the dollar cap. It only decides whether the loan is possible. Once you’re an individual owner on title, the limit comes from the property’s occupancy type, its unit count, and the appraised value.
How the Cash-Out Cap Actually Works
Underwriting divides the new loan amount by the appraised value. That ratio is the loan-to-value, or LTV. The Fannie Mae eligibility matrix shows a 75% maximum LTV on a cash-out refinance of a one-unit investment property. Two-to-four-unit rentals sit lower. The matrix text is hard to read cleanly for that row, so check the live matrix with a lender before you count on an exact figure.
Your cash is what’s left after the new loan pays everything else. Here is the sequence, using no dollar figures so you can plug in your own numbers:
| Step | What happens |
|---|---|
| 1. Value | Appraisal sets the property value |
| 2. Cap | Multiply value by the LTV cap |
| 3. Payoff | Subtract existing liens and mortgages |
| 4. Costs | Subtract closing costs and fees |
| 5. Result | The remainder is your net cash |
Fortune’s investor explainer describes the same approach: apply the cap to the property’s current estimated value, then back out what you owe. Cash-out pricing also applies, and investment-property pricing adjustments stack on top. That makes cash-out cost more than a refinance that returns no cash.
One more thing: the maximum is a ceiling, not a promise. A thin appraisal, a large existing balance, or a short reserve account can all shrink the number well below the cap.
The Rules Around the Cap
Three conditions sit next to the LTV cap.
Time on title. Per Fortune, at least one borrower generally needs to have owned the property for six months before a cash-out. If an existing first mortgage is being paid off, it usually must be at least 12 months old. Lenders call this waiting period seasoning.
Reserves. Reserves are liquid funds you keep after closing. Fortune reports that investment cash-out typically calls for about six months of them, and borrowers with several financed properties need more. Treat six months as the working expectation, and ask your lender whether your file calls for more.
Personal income. This is the big one for LLC owners. Fannie Mae underwrites your income and your debt-to-income ratio, or DTI. Rent from the property matters, but it is not the sole test. If your tax returns show heavy write-offs, or you own many financed rentals, the agency route can stall before the LTV math matters.
Fannie Mae also limits how many financed properties one borrower can carry. Don’t assume a number. Ask a lender where you stand before you plan a portfolio around it.
Moving Title Out of the LLC: The Real Sequence
Think of it as five steps, in this order.
1. Confirm the plan with a lender first. Before you sign any deed, get the lender to confirm the file works on its own terms.
2. Check the seasoning clock. The six-month ownership rule counts when title was recorded. An LLC purchase doesn’t automatically reset or satisfy it for a personal-name loan, so ask how your lender counts it.
3. Review the existing loan. Many mortgages have a due-on-sale clause, which lets the lender call the loan when ownership changes. Moving title out of the LLC can trigger it. Counsel should read your note before you act.
4. Deed to yourself. The deed out of the LLC and the vesting documents are part of the file.
5. Close in your own name. The appraisal drives value. Where rent is analyzed, appraisers use a rent schedule form for one unit or an operating income form for small multifamily.
Deeding out of the LLC can affect liability protection and insurance. It may also affect title insurance and transfer costs. Talk to an attorney and an insurance agent before you do it, because the answer depends on your state and your policies.
You’ll hear that you can deed the property back into the LLC after closing. That’s commonly discussed, but it carries lender-contract and due-on-sale risk. Treat it as a question for your counsel, not a trick.
Where the Rule Bends: Delayed Financing
Delayed financing is the one place an LLC gets recognized. It lets a cash buyer recover purchase money soon after buying. Under the same cash-out refinance section, the original purchase can be made by a natural person, an eligible trust, or an LLC or partnership in which the borrower holds 100% individual or joint ownership. The refinance must happen within six months of that purchase.
Two limits keep this from being a loophole.
- Title still has to leave the LLC at closing. Recognition of the original purchase doesn’t make the LLC a borrower.
- Proceeds track your documented cost, not an after-repair value. Fortune notes this too. Buy cheap, renovate hard, and the delayed-financing refinance will not return your renovation upside.
This is the answer to a common misconception that an LLC’s holding time doesn’t count. For delayed financing, it does, if you own the whole LLC.
Where the General Rule Breaks
A short list of edge cases, since this is where files get stuck.
- Partial LLC ownership. If you share the LLC with partners, delayed financing doesn’t apply. The 100% test is strict.
- Two-to-four units. The cap is lower than on one unit, and the appraisal leans harder on rent.
- Large portfolios. Even with a strong property, a long list of financed rentals can run into the financed-property limits and push reserves up.
- Small cash back. Whether a small amount of cash back still counts as cash-out depends on the transaction definitions. Don’t assume a threshold. Ask.
- Primary-residence assumptions. Cash-out caps on an owner-occupied home are higher than on an investment property. Don’t borrow that number for a rental.
The Alternative: Keep the LLC and Use DSCR
A DSCR loan, short for debt service coverage ratio, qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The ratio is monthly rent divided by PITIA, which is principal, interest, taxes, insurance and any association dues. If you want the full picture, see the complete DSCR loans guide.
Across the wholesale network Lendmire works with, many DSCR programs let you hold title in an LLC, subject to lender program eligibility. The owner commonly signs a personal guaranty, so the entity is not a shield from the lender. The lender will ask for entity documents such as formation papers and an operating agreement.
Here’s how the two paths line up on an LLC-held rental.
| Factor | Agency cash-out | DSCR cash-out |
|---|---|---|
| Borrower | Individual only | LLC or individual |
| Title | Must leave the LLC | Can stay in the LLC |
| Reviewed on | Personal income, DTI | Property rent vs. PITIA |
| Cash-out cap | 75% on one unit | Around 75% on standard rentals |
| Reserves | About 6 months | About 6 months, more above $1.5M |
Typical network figures look like this, always subject to lender guidelines and individual underwriting:
- Leverage: cash-out tops out around 75% LTV on a standard rental, and 70% on short-term-rental collateral.
- Seasoning: about six months of ownership, measured from title recording.
- Coverage: 1.00 is where many select programs start. A separate select-lender path goes below 1.00, with leverage and terms adjusted.
- Credit: a 620 floor exists in parts of the network. Most programs want around 660, and 700 and up opens the strongest tiers.
- Reserves: commonly about six months of PITIA, stepping up to about nine months above $1,500,000.
- Loan size: up to $3,000,000 on standard programs.
Notice the 75% cap matches on a one-unit rental. The difference isn’t leverage. It’s what the lender tests. One reads your tax returns and DTI. The other reads the lease, the appraisal, and the coverage ratio.
One property note: manufactured homes, log homes and barndominiums are not offered in the network’s DSCR programs.
Which Route Fits Which Investor?
This one is a genuine judgment call, because the agency route and the DSCR route each win in different files.
The agency route tends to fit an investor with a few rentals, clean personal income, low DTI, and no strong reason to keep the LLC. It works on personal income, and it requires you to take title personally.
DSCR tends to fit an investor with an LLC-held portfolio, complicated tax returns, or many financed properties. It also fits someone who doesn’t want to move title and risk a due-on-sale conversation. Investors often describe DSCR cash-out as a way to recycle capital into the next purchase.
Watch the trap, though. DSCR compares rent to PITIA only. Clearing the coverage test is not the same as positive cash flow. Repairs, vacancy, management, utilities and capital expenses all sit outside that math. A larger loan after cash-out raises the payment, so check what’s left after real expenses, not just the ratio.
A bigger down payment or more equity can lower the payment and lift coverage. It never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
Key Terms Defined
LTV (loan-to-value): the new loan amount divided by the appraised value of the property.
Seasoning: the waiting period a lender wants between buying a property and refinancing it.
Delayed financing: a refinance for a cash buyer soon after purchase that returns the money paid, up to documented cost.
Reserves: liquid funds you must still hold after closing, counted in months of payments.
PITIA: principal, interest, taxes, insurance and association dues, the full monthly housing payment.
DSCR: the property’s monthly rent divided by its PITIA, used to test whether the rent covers the payment.
Due-on-sale clause: a loan term that lets the lender demand payoff if ownership of the property changes.
This article is general information and not legal or tax advice. Consult a qualified attorney or CPA about your own situation, especially before moving title out of an entity.
If you are buying or refinancing a rental property and want to see how the numbers work, Lendmire can help you compare DSCR loan options based on the property income, credit profile, leverage, and investor goals.
Frequently Asked Questions
Can Fannie Mae lend directly to my LLC?
No. Fannie Mae’s borrower eligibility rules require individuals and certain trusts. The LLC can’t sign the note. You would need to take title in your own name before the refinance closes, and that transfer should be reviewed by counsel first.
What is the maximum cash-out on a one-unit rental?
Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
The matrix shows a 75% maximum LTV on a cash-out refinance of a one-unit investment property. Your actual cash is that cap applied to the appraised value, minus your payoffs and closing costs. Two-to-four-unit rentals are lower, so confirm the live matrix with a lender.
Does the LLC’s time owning the property count toward the waiting period?
Only in delayed financing, where the original purchase can be by an LLC you wholly own, and the refinance happens within six months of buying. For standard cash-out, at least one borrower generally needs six months on title, and lenders count that differently. Ask how yours does.
Does delayed financing give me my after-repair value?
No. Proceeds track your documented cost, not the property’s value after renovation. If you bought cheap and rehabbed, the refinance returns what you paid, not the improvement. A standard cash-out after seasoning measures against appraised value instead.
When is DSCR cash-out the better route?
Usually when you want the LLC to stay on title, when personal income or DTI is hard to document, or when you’re near financed-property limits. Qualification runs primarily on property-level rental income covering the payment, subject to lender guidelines. Leverage around 75% on a standard rental, credit, and reserves still apply.
For the mechanics of pulling equity out of a rental property, see Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
As a non-QM mortgage broker (NMLS# 2371349), Lendmire facilitates DSCR investor loans across 41 markets, including Washington, D.C. DSCR eligibility is generally reviewed around property-level rental income instead of personal income documentation, subject to lender guidelines, serving LLC-structured portfolios and self-employed borrowers who don’t fit conventional boxes. A two-time Scotsman Guide Top Mortgage Workplace (2025, 2026).
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References
1. Fannie Mae Selling Guide B2-2-01, General Borrower Eligibility Requirements
2. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
3. Fortune, Investment Property Cash-Out Refinance
This article is part of Lendmire’s investment property cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Do a Cash-Out Refinance on a Rental as an Investor · How Much a DSCR Cash-Out Releases After a Withdrawn Listing · How Much Cash Comes Out of a DSCR Cash-Out Refinance on Rental Homes?
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.