The Quick Read: There is no separate “no-PMI” cash-out program in the agency rulebooks. A standard conventional cash-out on a one-unit primary home tops out at 80% loan-to-value, and mortgage insurance applies only above 80%, so a standard cash-out generally carries none. The best program for your situation depends on your equity, credit score, property type and how long you have owned the home, and it is subject to lender guidelines and full file review.
What Does “No-PMI Cash-Out Program” Actually Mean?
It describes a conventional cash-out refinance that stays at or below 80% LTV. That is the logic of the program, not a rule with its own name. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
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.
A cash-out refinance is a new first mortgage that pays off the existing lien and hands the borrower the leftover equity. Fannie Mae’s Selling Guide section on cash-out refinance transactions defines the loan type and points to its Eligibility Matrix for maximum LTV by occupancy and property type. A refinance of a home with no mortgage on it can also count as cash-out.
Here is where the shopping confusion starts. Some marketing pages sell “no-PMI cash-out programs” as if they were products. Most of the time they are describing the standard 80% structure. Lendmire’s cash-out refinance programs page covers the loan type itself. This article covers how to pick the right structure.
Key Terms Defined
LTV (loan-to-value): the new loan amount divided by the appraised value of the home.
PMI (private mortgage insurance): insurance on a conventional loan that protects the lender when leverage is above 80%.
Cash-out refinance: a new first mortgage that pays off the old one and gives the borrower the extra equity in cash.
Limited cash-out (rate-and-term) refinance: a refinance that pays off the existing loan and costs, with only incidental cash back.
Seasoning: how long a loan or ownership has been in place before a new cash-out is allowed.
LLPA (loan-level price adjustment): a risk-based pricing adjustment on conventional loans, based on factors like credit score and LTV. It is built into pricing, not billed as a closing-cost line.
How Is a Conventional Cash-Out Underwritten, Step by Step?
The deal works through the same checkpoints every time. Each one can cap the loan or stop the file.
1. Value. The appraisal sets the home’s value. The LTV ceiling is applied to that value, so the appraisal sets the maximum loan.
2. Sizing. The new loan must fit under the ceiling. The payoff of the existing mortgage, any other liens being cleared and any financed costs come out of the loan before cash reaches the borrower. Cash-out is what is left.
3. Seasoning and title. Across the wholesale programs Lendmire places files with, the first mortgage being paid off must be at least 12 months old, counted note date to note date. At least one borrower must have been on title for 6 months. Exceptions exist for delayed financing, inheritance and legal awards.
4. Occupancy. A primary residence gets the highest leverage. Freddie Mac requires all borrowers on a primary-residence cash-out to occupy the home.
5. Credit and ratios. The wholesale conventional programs start at a 620 decision score. The automated finding governs most files, with a total debt ratio ceiling of 50%. Manually underwritten loans run at 36% or 45% ratio tiers, with reserve and score factors from the Eligibility Matrix.
6. Pricing. Cash-out loans carry a pricing adjustment based on credit score and LTV. At the same score and LTV, cash-out pricing sits higher than limited cash-out. That is the cost that replaces PMI on this loan type, and it is worth understanding before comparing offers.
Most delays on these files trace back to steps 3 and 4: a payoff loan that is a few months short of 12, or a title change nobody documented. Pull the prior note date and the deed history before the file goes in.
Why LTV, Not the Cash-Out Itself, Decides PMI
PMI follows the new loan’s leverage. Taking cash out does not trigger it. Going above 80% LTV does. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
That is why an 80% ceiling on a one-unit primary home works as a built-in no-PMI structure. Mortgage insurance is required above 80% LTV on conventional loans. Below that line, there is nothing to insure. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Run the logic on a home worth 100 units of value. At the 80% ceiling, the new loan can be no more than 80 units. If the existing mortgage is 50 units, the borrower can take roughly 30 units less financed costs. If the existing mortgage is 70 units, only about 10 remain. The same house yields very different cash depending on the balance already owed. The calculation is simple, and many borrowers skip it until the appraisal lands.
Where Does the General Rule Break?
The 80% ceiling is the rule. These are the places where it moves or where the no-PMI logic fails.
| Situation | Leverage and PMI outcome |
|---|---|
| One-unit primary residence | 80% LTV, no PMI at or below the ceiling |
| Two- to four-unit primary, second home | 75% LTV |
| Investment property | 75% LTV |
| Limited cash-out, one-unit primary | Up to 95%, PMI above 80% |
| Wholesale no-PMI lane | Up to 89.99% LTV, specific conditions |
The 89.99% lane. One wholesale lane reaches 89.99% LTV with no mortgage insurance. It requires a 680 score and a 50% ratio ceiling on a thirty-year fixed rate. The home must be a primary residence with a conforming balance, and the file has its own six months of seasoning. It is a lender-specific structure, not an agency rule, and it is not written in every state. In Texas, a cash-out on the homestead is capped by the state constitution at the agency figure, so this lane is not written there. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Limited cash-out is not cash-out. A rate-and-term refinance can reach 95% LTV on a one-unit primary residence, or 97% where the existing loan is agency-owned and the first-time-buyer program allows. The borrower gets only incidental cash back, and mortgage insurance applies above 80%. A borrower who sees “95%” in an ad and expects cash is reading the wrong loan type. Fannie Mae’s limited cash-out guidance lays out those conditions. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
A paid-off second lien. A refinance that clears a home equity loan taken for non-purchase uses is generally treated as cash-out, not as a rate-and-term deal. A purchase-money second lien is different. Confirm how the second lien was used before choosing the loan type.
Student loan cash-out. Fannie Mae allows cash-out to pay off student loans, with the cash-out pricing adjustment waived. The standard cash-out LTV limit still applies.
Manufactured housing. Fannie Mae’s manufactured housing product matrix shows single-width homes are not eligible for cash-out on a principal residence. Multi-width homes follow separate rules.
Fannie versus Freddie. The two agencies are not identical. Freddie does not allow non-occupant borrowers on a cash-out of a primary residence, and Fannie has no such restriction. Divorce buyouts also run differently between them. A file that fails at one agency can sometimes fit the other, which is one reason a broker shops more than one wholesale lender.
PACE liens. Some properties with a PACE assessment lose cash-out eligibility if the borrower has the equity to clear the lien and does not.
Texas. The homestead rules are state-specific and stricter on the cash-out side. Texas borrowers should expect the agency ceiling to be the working limit.
What If You Are Over the 80% Line?
You have five practical moves. Which one fits depends on how far over you are and what the cash is for.
1. Take less cash. Shrinking the cash-out lowers the new loan. Often the cleanest fix.
2. Bring cash to closing. Paying part of the existing balance down at closing lowers the LTV on the new loan.
3. Keep the first mortgage and add a second lien. This leaves the existing loan alone and borrows against equity separately. The first mortgage terms stay as they are, which matters if the current loan is a good one.
4. Wait for value or paydown. Appreciation and principal reduction both move the LTV down. A new appraisal later may clear the line.
5. Look at the 89.99% wholesale lane. If you have a 680 score, a thirty-year fixed on a conforming primary residence and the seasoning, this lane may fit. A borrower in Texas cannot use it.
One more point on PMI you already pay. A cash-out refinance can eliminate existing PMI if the new loan lands at or below 80% LTV. It does not make sense if you would otherwise drop PMI soon by paydown. Under the Homeowners Protection Act, as the CFPB explains, a borrower can request cancellation when the balance is scheduled to reach 80% of the original value, and the servicer must end it automatically at 78%. Cancellation requires good payment history, no subordinate liens and no decline in value. Lender-paid mortgage insurance follows different rules. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Is “No PMI” the Same as the Lowest Cost?
No. Avoiding PMI removes one cost and leaves others in place.
A cash-out refinance replaces your existing first mortgage with a larger new one. That changes the whole payment, and it resets the term and the rate. If your current rate is one you would not get today, you give that up on the entire balance, not just the cash portion. The pricing adjustment on cash-out loans also lands in the pricing. Fannie Mae’s cash-out guidance confirms an LLPA applies to certain cash-out refinances, based on LTV and credit score.
So compare structures, not just the PMI line. A borrower weighing a cash-out against keeping the current loan and adding a second lien should look at the total cost of each path, including closing costs and what happens to the existing loan terms. The Loan Estimate lays this out side by side for each option you actually apply for.
Costs for any “no closing cost” offer are built into the rate or the balance. They are not gone.
Can You Roll Fees Into the Loan?
Yes, within limits. Closing costs and prepaid items can be financed into a cash-out loan as long as the total stays under the LTV ceiling. They come out of the cash you receive.
Limited cash-out works differently. It allows the payoff, the closing costs and a purchase-money second lien to be rolled in, with only incidental cash back. A borrower who needs real cash cannot use it. A borrower who only wants a lower balance or a changed term, and has high leverage, may be better served there.
How to Find the Best Program for Your Situation
The best program depends on your property type, credit profile, equity, documentation and what the cash is for. No single product wins for everyone.
A mortgage broker shops multiple wholesale lenders and matches the scenario to the program. Lendmire is a mortgage broker, not a lender. It arranges conventional loans through a network of wholesale cash-out refinance lenders, and lenders review and approve. The lenders that write a given file depend on its leverage, score and property.
Questions that sort programs out fast:
- Is the home a one-unit primary residence? That decides whether the ceiling is 80% or 75%.
- Is the first mortgage at least 12 months old, and has someone been on title for 6 months?
- Is the decision score at least 620, and is the debt ratio under the 50% automated ceiling?
- Do you need more than 80% LTV without mortgage insurance? Then the 89.99% lane and its 680 score are the thing to test.
- Is the property in Texas, or a manufactured home, or does it carry a PACE lien? Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Documents to have ready: the current mortgage statement, the deed or title history, income and asset records, and the payoff on any second lien.
What Do Borrowers Actually Do With the Cash?
CFPB research on cash-out borrowers found many pay down other debts, especially credit card and auto loans. Credit scores rose right after the refinance and then slipped gradually. Card balances drifted back toward earlier levels within a year, though not all the way.
The lesson is practical. Using equity to clear high-cost debt only works if the balances stay cleared. Otherwise the borrower ends up with a bigger mortgage and the same cards.
Frequently Asked Questions
Does a conventional cash-out refinance require PMI?
Not at or below the 80% LTV ceiling for a one-unit primary home. PMI applies above 80% LTV, and standard cash-out loans do not go there. The agencies cap leverage, so the structure carries no mortgage insurance by design. Program terms are subject to lender guidelines and full file review.
How much equity do I need to keep?
At least 20% on a one-unit primary residence, since the ceiling is 80% LTV. On two- to four-unit primary homes, second homes and investment property, the ceiling is 75%, so 25% stays in the property. The wholesale 89.99% lane leaves a smaller cushion but has stricter conditions. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
How long must I own the home before a cash-out?
Across the wholesale programs Lendmire places files with, the first mortgage being paid off must be at least 12 months old, and a borrower must have been on title for 6 months. The 89.99% lane has its own six months of seasoning.
Can I cash out and drop the PMI I pay now?
Often yes, if the new loan lands at or below 80% LTV. It may not be worth it if your balance is close to the point where PMI would cancel anyway. The Homeowners Protection Act lets you request cancellation at 80% of original value and requires automatic termination at 78%.
Is the 95% or 97% LTV conventional loan a cash-out?
No. Those figures belong to limited cash-out refinances, which allow only incidental cash back and carry mortgage insurance above 80%. A full cash-out on a one-unit primary home is capped at 80%. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
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 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.
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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
2. Fannie Mae Selling Guide B2-1.3-02, Limited Cash-Out Refinance Transactions
3. Fannie Mae Manufactured Housing Product Matrix
4. CFPB: When Can I Remove Private Mortgage Insurance PMI from My Loan
5. CFPB research on cash-out borrowers
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 PMI Is Added to the Payment on a Conventional Loan? · How the HPA Schedule Ends PMI on a Conventional Loan · Best Cash-Out Refinance Program After Meeting the Seasoning Period on 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
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.