The Quick Read: A conventional cash-out refinance caps your total borrowing at a percentage of the home’s appraised value, and that cap shifts with how you use the property and how many units it has. A one-unit home you live in gets the highest cap, 80%. Two- to four-unit homes you live in, second homes and investment properties sit at 75%. The cap is a ceiling, not a promise, and the rest of your file decides where you land under it.
The Caps at a Glance
Conventional cash-out tops out at 80% loan-to-value, and only on a one-unit home you live in. Every other row is 75%. LTV (loan-to-value) is the new loan balance divided by the appraised value. The table below also shows the purchase caps, so you can see how much room cash-out takes away.
| Property and occupancy | Max cash-out LTV | Equity you keep | Purchase cap, for contrast |
|---|---|---|---|
| 1-unit principal residence | 80% | At least 20% | 95% (97% first-time, fixed) |
| 2–4 unit principal residence | 75% | At least 25% | 95% |
| Second home | 75% | At least 25% | 90% |
| Investment, 1 unit | 75% | At least 25% | 85% |
| Investment, 2–4 units | 75% | At least 25% | 75% |
These are the figures across the wholesale conventional programs Lendmire places files with. They are subject to lender guidelines and full file review, and none of it is a commitment to lend.
Read the table by occupancy first, then by unit count. Occupancy is how you declare you will use the home: live in it, use it part of the year, or rent it out. That declaration drives the leverage on every conventional loan.
Why Does Unit Count Lower the Cap?
More units mean a lower cap because the lender takes more risk if the loan goes bad. A two- to four-unit home is harder to resell than a single-family house. Its value also leans more on how the building is configured and used. So the ceiling drops five points, from 80% to 75%.
That five-point drop is real money in practice. On a one-unit home you live in, you must keep at least a fifth of the value as equity. On a two- to four-unit home, you must keep at least a quarter. If you hoped to pull out a certain amount, a smaller cap can leave you short.
Second homes work the same way. They are an occupancy category with their own cap, and the agency matrix treats them as one-unit properties. A multi-unit vacation property does not fit that row.
If you want the program overview first, Lendmire’s cash-out refinance programs page lays out how these loans are arranged. This article stays on the caps.
How Your Maximum Loan Gets Sized
Your maximum loan is the appraised value multiplied by the applicable cap. The steps run in a fixed order.
1. Pick the row. Occupancy, unit count and transaction type set the cap.
2. Use the appraised value. Not what you paid. Not an online estimate. The appraiser’s number controls.
3. Count every lien. The cap applies to the combined balance, so any second mortgage that stays in place counts against the same ceiling. That combined figure is called CLTV (combined loan-to-value).
4. Subtract what the loan must pay off. The new loan pays off your current first mortgage and any liens you are clearing. It can also cover closing costs and prepaid items.
5. What remains is your cash. Costs rolled into the loan use up part of your LTV room, so net cash comes in lower than the headline cap suggests.
Say you own a one-unit home you live in. Your current mortgage sits at 55% of value, and you want the full cash-out limit. The new loan can reach 80%. That leaves up to 25 points of value, before costs, as cash. Now run the same home as a two-unit property with a 75% cap. The room shrinks to 20 points. Same house value, less cash.
Where the Cap Comes From, and the Clocks That Run First
The caps are agency rules, and the agencies also set waiting periods you must clear before sizing begins. The Fannie Mae Eligibility Matrix lists cash-out limits by occupancy and unit count. It also shows limited cash-out limits that run far higher. The agency revises that matrix, so check the current version before you rely on a number.
Two clocks come before the math. Per the Fannie Mae Selling Guide section on cash-out refinances, the first mortgage being paid off must be at least 12 months old, counted from note date to note date. At least one borrower must also have been on title for six months. A home listed for sale must come off the market by the time the loan funds.
That guide also covers several other points:
- Proceeds can pay off the first mortgage and any other liens, cover closing costs and prepaids, and put cash in your pocket for any purpose.
- Higher debt ratios can trigger a reserve requirement. Reserves are savings left over after closing.
- Delayed financing, inheritance and legal awards have their own treatment of the six-month title clock. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
The agency matrix also pairs higher LTV tiers with higher credit score requirements. Pricing adjustments scale with score and LTV too. Across the wholesale programs Lendmire places files with, the conventional floor starts at a 620 decision score, and the automated finding governs most files with a 50% total ratio ceiling. A file at the top of the cap tends to need more from the credit profile than one sitting well below it. Lendmire’s piece Conventional Cash-Out Refinance Credit Requirements by Occupancy and LTV goes deeper on that pairing.
Where the General Rule Breaks
The table covers standard one-to-four unit homes, and a few situations bend or break it.
The 89.99% wholesale lane. One wholesale lane reaches 89.99% LTV with no mortgage insurance. It requires a 680 score and a 50% ratio on a thirty-year fixed rate. It applies to a primary residence at a conforming balance, and it carries its own six months of seasoning. It is a narrow lane, not a rule. It is not written on Texas homesteads. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Texas homestead. In Texas, the state constitution caps cash-out on the homestead at the agency figure. Higher-leverage lanes do not apply there.
Manufactured housing. Cash-out on a manufactured home sits well below the site-built caps. Treat it as a separate matrix row and ask for the current figure.
Differences between the two agencies. Fannie Mae and Freddie Mac are close but not identical. The gaps show up on certain multi-unit rows and on manufactured housing. Because lenders may also set overlays (rules stricter than the agency’s), the cap a lender offers can sit below the agency ceiling.
Recently listed homes. The current guide says a listed property must be removed from the market by funding. Older versions tied a lower cap to recent listings. Confirm the current text with your loan officer before assuming either.
Inheritance and divorce awards. Property you inherited, or received through a divorce or similar legal award, may not face the six-month title wait. Rules on trusts and timing are specific, so ask early.
Occupancy gray areas. A house-hack, where you live in one unit and rent the others, is a primary residence if you truly live there. A vacation home you rent out part of the year is still classified by how you declare and use it. A former primary you have moved out of is no longer a primary residence. Occupancy is a declaration you sign, so make it accurate.
If you borrow above the conforming balance, a separate set of lanes applies. Lendmire’s article Jumbo Cash-Out Refinance LTV Limits by Lane and Occupancy covers them.
Cash-Out vs. Limited Cash-Out
A limited cash-out refinance pays off your current loan and costs, with only a very small amount back to you, and it allows far higher leverage. On a one-unit principal residence, the rate-and-term lane reaches 95% LTV, or 97% where the existing loan is agency-owned and the first-time-buyer program allows it. Mortgage insurance applies above 80%. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
The idea of “limited” is a cash-back ceiling. Fannie Mae’s legacy RefiNow criteria show the concept: cash back was capped at a very small amount. That program is old, so use it only as an illustration. Today’s limits sit in the current matrix.
So the line between the two is the cash in your hand. Take more than a small amount back, or pay off a lien that was not part of buying the home, and the loan is cash-out. The cap then drops to 80% or 75%.
What the Choice Looks Like in Practice
The cap tells you how much equity is within reach. Whether you should reach for it is a separate question. Three things drive the decision.
- Does the number work? If you need more cash than the cap allows, you can wait, borrow less, or look at a different product. A home equity loan or line of credit leaves your first mortgage in place, while a cash-out refinance replaces it. The CFPB’s guide to using home equity notes that no option turns all of your equity into cash.
- What happens to your loan? The new loan resets your rate and terms. The payment may rise or the payoff date may move out, and you pay closing costs again.
- What is the money for? Using mortgage debt to pay off other debts can raise your risk if money gets tight, since the home now secures that debt.
Mortgage insurance matters at the edges. It is required above 80% LTV, can be cancelled at 80% of original value with a good payment history, and ends automatically at 78%. A cash-out at the 80% cap generally stays clear of it. The 89.99% lane exists in part to avoid it.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Key Terms Defined
LTV (loan-to-value): the loan balance divided by the home’s appraised value.
CLTV (combined loan-to-value): all loans secured by the home, added together, divided by the appraised value.
Cash-out refinance: a new mortgage that pays off the old one and gives you extra cash from your equity.
Limited cash-out refinance: a refinance that pays off the old loan and costs, with only a very small amount of cash back.
Occupancy: how you declare you will use the home: as a principal residence, a second home or an investment property.
Seasoning: the minimum time a loan or your ownership must exist before you can refinance for cash.
Overlay: a lender rule stricter than the agency’s own limit.
What to Do Next
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. Bring your occupancy, unit count and rough balance, and the cap for your row becomes the starting point.
Frequently Asked Questions
Is the 80% cap the same for every home?
No. It applies to a one-unit principal residence. The cap depends on occupancy, unit count and transaction type, and lenders may set stricter limits.
Does the cap set how much I can borrow?
It sets the ceiling only. Your loan amount also depends on the appraised value, your credit and debt ratios, and any reserves required. Closing costs rolled into the loan use up part of the room, so your cash comes in below the headline figure.
Can I do a cash-out refinance right after buying?
Usually not. The loan being paid off must be at least 12 months old, and a borrower must have been on title for six months. Delayed financing, inheritance and legal-award exceptions exist, and each has its own conditions.
How is a cash-out refinance different from a HELOC?
A cash-out refinance replaces your first mortgage with a new, larger one. A home equity loan or line of credit sits behind your first mortgage and leaves it untouched. The first changes your main loan’s terms. The second adds a separate loan.
Do Fannie Mae and Freddie Mac set the same caps?
They are close but not identical. Differences appear on certain multi-unit rows and on manufactured housing, and individual lenders may add overlays. Ask for the current cap on your specific property type.
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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References
1. Fannie Mae Eligibility Matrix
2. Fannie Mae Selling Guide: Cash-Out Refinance Transactions
3. Fannie Mae RefiNow criteria
4. CFPB: Using Your Home Equity guide
This article is part of Lendmire’s Conventional Loans series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Can a Homeowner Do a Conventional Cash-Out Refinance in Six Months? · Conventional Cash-Out Refinance Limits for a Large Loan · Can a Homeowner Take Cash Out With a Conventional Refinance?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.