The Quick Read: The loan program sets your ceiling first, and the lender’s own rules can lower it. On a conventional loan for the home you live in, the usual ceiling is 80% of the home’s value. A few routes go higher, such as VA-backed loans and one wholesale conventional lane that reaches 89.99% with no mortgage insurance. Which lender fits depends on your property, credit, and how much equity you want to pull.
Key Takeaways
- Loan-to-value (LTV) is the new loan divided by the appraised value. A higher ceiling means less equity left in your home.
- Conventional cash-out on a one-unit primary home generally tops out at 80%. Two- to four-unit homes, second homes, and rentals sit at 75%.
- The best program for your situation depends on your credit, your property type, and whether you have VA eligibility.
- “Limited cash-out” and streamline loans reach higher LTVs, but they pay off your old loan. They do not hand you real cash.
- A broker that shops several wholesale lenders can match your file to the program that fits.
Why Do Cash-Out Ceilings Differ From Lender to Lender?
Three layers set your ceiling: the loan program, the lender’s added rules, and the channel you apply through. The program sets the outer limit. A lender can stop below it. That is why two lenders offering the same loan type quote different maximums.
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 lender’s added rule is called an overlay. It is a limit stricter than the program’s. A lender might cap cash-out at a lower LTV, ask for a higher credit score, or skip certain property types.
The channel matters too. A single bank offers its own menu. A mortgage broker works across many wholesale lenders, so one file can be matched to whichever lender’s overlays fit it. Lendmire’s cash-out refinance programs page lays out the options it arranges.
I place files through a network of wholesale cash-out lenders every week. The headline ceiling rarely decides the outcome. The appraisal, the property type, the credit score, and the existing loan usually do.
How Is a Cash-Out Refinance Underwritten, Step by Step?
The lender sizes the new loan from the appraised value, subtracts what you owe, then checks that you can repay it. Here is the sequence.
1. Classify the loan. A refinance that only pays off your old mortgage and costs is “limited cash-out.” One that pays you the difference is full cash-out.
2. Order the appraisal. LTV is the new loan divided by the appraised value. A lower appraisal shrinks everything that follows.
3. Count every lien. A second mortgage or home equity line that stays in place reduces your available cash.
4. Review credit, income, and debts. Most wholesale conventional programs start at a 620 decision score. The automated underwriting finding governs most files, with a total debt ratio ceiling of 50%. Manually underwritten loans use tighter ratios.
5. Check the clocks. The mortgage being paid off must be at least 12 months old, counted note date to note date. You must have been on title for 6 months. Exceptions exist for delayed financing, inheritance, and legal awards.
6. Price the loan. Cash-out carries its own pricing adjustment, so it costs more than a no-cash refinance with the same balance. The effect shows up in the rate or in points. Your Loan Estimate shows the full terms.
7. Close. The new loan pays off the old first mortgage and required liens. Your Closing Disclosure shows the net cash to you.
All of this is subject to lender guidelines and a full file review. Nothing here is a commitment to lend.
Which Loan Types Reach Higher?
VA-backed cash-out reaches the highest, followed by one wholesale conventional lane. Standard conventional and FHA cash-out both stop at 80%.
| Program | Typical ceiling | The catch |
|---|---|---|
| Conventional, one-unit primary home | 80% LTV | Mortgage insurance rarely applies at this level |
| Wholesale no-MI lane | Up to 89.99% LTV | 680 score, 50% ratio, 30-year fixed, conforming balance |
| FHA cash-out | 80% of adjusted value | Down from 85% years ago |
| VA cash-out | Up to full reasonable value | Funding fee generally applies unless exempt |
| Limited cash-out | 95% (97% in some cases) | Only incidental cash back |
The 89.99% lane is narrow. It requires a primary residence, a thirty-year fixed loan, a conforming balance, and its own six months of seasoning. It is not written in Texas, where the state constitution caps homestead cash-out at the agency figure.
The conventional 80% cap and the second-home 75% cap trace to the Fannie Mae Eligibility Matrix, the table that controls agency LTV limits. For FHA, HUD Mortgagee Letter 2019-11 cut the maximum LTV and combined LTV on cash-out refinances from 85 to 80 percent of adjusted value. HUD’s stated reason was to limit risk to the FHA insurance fund from rising insured balances. Older articles quoting 85% are out of date.
VA works differently. VA’s cash-out page explains that you can take cash from equity or refinance a non-VA loan into a VA-backed one. VA does not lend directly. You go through a private lender, and a funding fee may be due at closing. Lenders often set their own cap below what VA allows. Lendmire’s piece How a VA Cash-Out Refinance Limit Is Sized From Appraised Value walks through the sizing.
Where Does the General Rule Break?
Several situations change the ceiling or the type of loan. Know these before you compare lenders.
Occupancy and unit count. Occupancy decides leverage. A second home or rental cash-out sits at 75%, below the 80% that applies to a one-unit home you live in. Two- to four-unit primary residences also sit at 75%.
Limited cash-out. Fannie Mae’s Selling Guide on limited cash-out refinances defines it as a refinance that pays off the existing loan with only small cash back. The 95.01 to 97% tier is narrow. It needs a fixed rate, a term up to 30 years, and an existing loan that Fannie Mae owns. Manufactured housing is excluded unless it meets MH Advantage requirements. That is a rate-and-term tool, not a way to pull equity.
Government streamlines. The FHA Streamline and VA IRRRL are for borrowers who already have an FHA or VA loan. They are not cash-out loans. The IRRRL is a rate-and-term refinance that carries a 0.5% funding fee unless you are exempt, requires a net tangible benefit, and has seasoning of the later of 210 days and six payments.
Manufactured homes. Cash-out limits on manufactured homes run well below site-built homes. Check with a broker early.
Co-owner buyouts. Freddie Mac treats a buyout as a special-purpose cash-out under its Guide Section 4301.6. It needs a written agreement signed by all parties, and the borrower keeping the home cannot receive proceeds.
Jumbo loans. Above the conforming limit, the jumbo lanes take over with a 660 decision score and their own cash-out terms.
Suspended programs. Some high-LTV refinance programs are currently suspended. Do not plan around one you saw in an old flyer.
What Does the Cash Look Like After Payoff?
Your check is the ceiling minus your payoff minus closing costs. These numbers are illustrative percentages of the home’s value, not a quote.
Say a home appraises at 100% of its value. You owe 55% on the first mortgage. At an 80% ceiling, the new loan can reach 80%. Subtract the 55% payoff and you have 25% of value, before closing costs and any other liens. Closing costs come out of that. Remember too that costs are paid on the whole new balance, not just the cash portion.
Now take a 62% payoff. The same ceiling leaves 18% of value. The ceiling did not change, but the cash did. A lender with a higher ceiling helps most when your payoff is already high.
What Is the Cost of Borrowing at a Higher LTV?
Higher leverage means less equity cushion and often more cost. Pricing adjustments for cash-out are built into the loan terms. Mortgage insurance applies above 80% LTV on conventional loans. You can request cancellation at 80% of the original value, given good payment history, no subordinate liens, and no decline in value. The servicer must end it automatically at 78%. The no-MI wholesale lane skips that, but it comes with a 680 score and a 50% ratio.
The bigger risks are practical. A cash-out refinance may extend the time it takes to pay off your mortgage. Your monthly payment may increase, because you are replacing your mortgage with a larger loan. An appraisal that comes in low can shrink the cash. A market dip after closing leaves less margin if you sell.
If you plan to use the cash for debt consolidation, understand what changes. You are turning unsecured debt into debt secured by your home.
What Should You Ask Any Lender?
Ask for the real ceiling for your file, not the marketing ceiling. A short list helps:
- What is your maximum LTV for my property type and occupancy?
- Do you add any overlays above the program minimum on credit score or ratios?
- How does the existing loan’s age affect eligibility?
- Does a second lien that stays in place reduce my cash?
- What mortgage insurance or funding fee applies at my LTV?
A broker asks these questions across several lenders at once. That is the practical advantage of the channel.
Which Path Fits Your Situation?
The best program for your situation depends on who you are and what you hold.
| Your situation | Route to consider |
|---|---|
| Veteran with a certificate of eligibility | VA cash-out |
| Strong credit, one-unit primary home, wants most equity without MI | Wholesale no-MI lane, if you meet its terms |
| Existing FHA loan, modest equity | FHA cash-out at 80% |
| Wants lower payment, not cash | Rate-and-term or streamline |
| Large balance above conforming | Jumbo lane |
| Little equity, needs a small amount | Compare a home equity line or a second lien |
Treat the table as a starting point. Lender guidelines, credit approval, and property review decide what fits.
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.
Key Terms Defined
Loan-to-value (LTV): The new loan amount divided by the home’s appraised value.
Combined LTV (CLTV): LTV that also counts other loans secured by the home, such as a second mortgage.
Cash-out refinance: A new mortgage that pays off your old one and gives you the difference in cash.
Limited cash-out refinance: A refinance that pays off your old loan and costs, with only small cash back.
Overlay: A lender’s own rule that is stricter than the loan program’s.
Seasoning: The waiting period a loan or ownership must meet before you can refinance.
Mortgage insurance: Coverage the borrower pays for on conventional loans above 80% LTV. It cancels at 80% and ends at 78%. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
Frequently Asked Questions
Can I get a cash-out refinance at 100% LTV?
Only through VA-backed cash-out, up to the full reasonable value set by the appraisal, and subject to VA rules and the lender. Many lenders set their own cap below that. Conventional and FHA cash-out stop at 80%, so a 100% cash-out is not a realistic expectation on those loans.
Does a higher ceiling mean a better lender?
Not by itself. A higher ceiling can come with stricter credit or ratio requirements, extra cost, or narrower property rules. The right lender depends on your credit, property, and how much equity you need, so compare full terms on the Loan Estimate.
What if I need cash but have low equity?
Compare a cash-out refinance against a home equity line or a second lien. A new first mortgage resets the whole balance, while a second lien leaves your existing loan alone. Which one fits depends on what you owe, what the first mortgage costs you, and how much cash you need.
Does an FHA or VA streamline give me cash?
No. The FHA Streamline and VA IRRRL are for existing FHA and VA loans and change your terms without paying you equity. If you want cash on those loans, you need a cash-out refinance.
Do I pay more by using a broker?
A broker is paid by the lender or by you, and that compensation is disclosed on your Loan Estimate. Compare the full terms, not one line. A broker’s value is access to several wholesale lenders, so the program is matched to your file.
For your own numbers, request a scenario review with Lendmire.
For current guidelines and terms, see Lendmire’s refinance programs page.
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.
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
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 Eligibility Matrix
2. HUD Mortgagee Letter 2019-11
4. Fannie Mae Selling Guide B2-1.3-02, Limited 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: Cash-Out Refinance vs Keeping a Solar Panel Loan for a Homeowner · How a Lender Sets the Loan-to-Value Cap on a Duplex Cash-Out Refinance
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
Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.