The Quick Read: The agency’s published eligibility matrix lists cash-out refinance caps of 75% loan-to-value on a one-unit investment property and 70% on a two-to-four-unit property, but those caps apply only to loans sold to the agency, while DSCR cash-out loans follow lender guidelines, and across the network most standard rentals top out at 75% LTV. If you are weighing the two routes, the cap is only the first of several gates. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
- Agency caps: Market surveys report 75% for one unit and 70% for two to four units on an investment cash-out. Primary-residence cash-out sits higher.
- DSCR cash-out: A cash-out refinance on a standard rental typically tops out around 75% LTV across the network. Short-term-rental collateral is lower, at 70%.
- Two tests, not one: Equity (value times the LTV cap) and rent coverage (rent against the full payment) run side by side. The smaller loan wins.
- Ownership clock: Agency loans and most DSCR programs both want seasoning. About 6 months of ownership is the common DSCR expectation.
- Cash is not guaranteed: The appraisal, the existing payoff, credit, reserves, and rent coverage all shape how much you can pull out.
Key Terms Defined
LTV (loan-to-value): The new loan divided by the value the lender uses. A 75% LTV means the debt is three-quarters of that value. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Cash-out refinance: A new loan that pays off the old one and hands you the extra as cash. Lenders set a lower leverage cap on it than on a purchase.
Limited cash-out refinance: An agency product that pays off the old loan and allows only a small amount of cash back. It sits on a different row of the agency matrix.
Seasoning: The waiting period a lender wants between buying a property and refinancing it, or between two loans.
Delayed financing: An agency exception that lets a cash buyer refinance early. The new loan is tied to what the buyer documented paying.
DSCR (debt service coverage ratio): Monthly rent divided by the full monthly payment. DSCR loans are non-agency business-purpose loans that qualify primarily on property-level rental income covering the payment, subject to lender guidelines.
PITIA: Principal, interest, taxes, insurance, and any association dues. This is the payment figure that rent is measured against.
DSCR Cash-Out Calculator
Run the cash-out numbers in your market
Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 8, 2026
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Program parameters update from Lendmire’s centralized guideline source. Taxes and insurance are editable estimates.
As of Oct 8, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Property value, balance, taxes, and insurance are editable estimates. Maximum loan-to-value varies by lender, program, property type, and seasoning. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
What Is the Fannie Mae Cash-Out LTV Cap on an Investment Property?
Fannie Mae’s cap is 75% on a one-unit investment property and 70% on a two-to-four-unit investment property. Market surveys report those figures from the agency’s eligibility matrix. On a DSCR cash-out refinance of a standard rental, the network figure is typically 75% LTV.
The number you want is not in the cash-out rule itself. The agency’s cash-out refinance topic covers structure, acceptable uses, and delayed financing, then points you to the matrix for maximum LTV. Many investor pages skip that step and quote a figure from the wrong row. The primary-residence row is higher, and it does not describe a rental.
The agency also treats a two-to-four-unit rental as riskier than a single unit. That is why its cap drops a notch.
| Factor | Agency route | DSCR route (network) |
|---|---|---|
| Who sets the rules | Agency guide | Individual lender guidelines |
| Cash-out LTV, standard rental | 75% (1 unit), 70% (2-4) | Typically up to 75% |
| Short-term-rental collateral | Rent schedule only | Typically 70% on cash-out |
| Reviewed on | Personal income and DTI | Property rent vs. PITIA |
| Title | Usually personal name | LLC often allowed, per program |
LLC title is allowed on many DSCR files, subject to lender program eligibility.
The agency’s caps are a useful benchmark, not a rule for DSCR files. A cash-out cap around the mid-70s on standard rentals is a common pattern across the market. Lenders still set their own limits, and every file is underwritten individually.
How Does Underwriting Treat the Number, Step by Step?
Underwriting treats the LTV cap as one of several limits and funds the smallest loan that clears all of them. Equity sets one ceiling. Rent coverage sets another. Credit, reserves, and property type decide whether the file qualifies at all.
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage.
Step 1: The ownership clock. The agency requires at least one borrower to be on title for 6 months before disbursement. It also requires the first mortgage being paid off to be at least 12 months old, measured note date to note date, per the agency’s cash-out topic. DSCR seasoning is lender policy, not a statute. About 6 months of ownership is the common expectation across most of the network, measured from title recording.
Step 2: The value basis. The lender divides the new loan by the value it uses. Depending on how long you have owned the property, that may be the appraised value or a cost-based figure. If you bought recently, the purchase documents can matter as much as the appraisal.
Step 3: The appraisal and rent support. For a single-family rental, appraisers commonly produce a Form 1007 rent schedule. For two-to-four-unit properties, the report is typically a Form 1025. Non-agency files often use the same forms to support market rent, though each lender decides which forms it needs.
Step 4: The two tests. Run the equity test first. Take the value, apply the leverage cap, and subtract the existing payoff. That is the room you have before costs. Then run the coverage test. Divide the rent by the full payment on the new loan.
A larger loan means a larger payment, so cash-out can pull coverage down. Strong equity does not override a rent shortfall.
Step 5: The remaining gates. Credit and reserves come next. A 620 score is a floor in parts of the network, most programs want about 660, and 700 or higher opens the strongest leverage tiers. Reserves vary by lender, leverage, and loan size. They commonly run around 6 months of PITIA, and loans above $1,500,000 typically step up to about 9 months. Standard programs reach up to $3,000,000, and above $2,500,000 the network generally holds to 30-year fixed structures.
What Structures and Variations Exist?
The main variations are limited cash-out, delayed financing, unit count, short-term-rental collateral, and loan term. Each one changes the cap or the clock. Mixing them up is where most investors misread the number.
Limited versus full cash-out. A limited cash-out refinance allows only a small cash-back amount. Market surveys report a 75% cap for one-to-four-unit investment property on that row. It is a different product with a different purpose, such as cleaning up a loan structure. If you want real cash, you are on the full cash-out row.
Delayed financing. This agency exception waives only the ownership wait. The loan is still a cash-out, and the amount is tied to your documented investment plus eligible costs. The agency checklist expects an arm’s-length purchase and documented source of funds. A purchase financed with borrowed money generally falls outside it.
Unit count. On the agency side, a fourplex gets a lower cap than a single-family rental. DSCR programs also weigh property type, but the network figure of 75% on a standard-rental cash-out is the typical ceiling.
Short-term-rental collateral. An agency rent schedule captures long-term market rent, not nightly revenue. On a DSCR short-term-rental cash-out, the ceiling is typically 70% LTV. Expect a 640 or higher score and about 12 months of hosting history. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
Term structures. The spine of the network is the 30-year fixed. Select lenders offer 40-year terms and interest-only periods, and ARM structures exist for investors who want them. Longer terms and interest-only periods can lift coverage because they lower the monthly obligation. They do not raise the leverage cap.
For a deeper look at how the agency version works in practice, see Lendmire’s piece Fannie Mae Cash Out Refinance Investment Property.
Where the General Rule Breaks
The rule of thumb is a mid-70s cap and a 6-month clock. It breaks on seasoning edge cases, thin appraisals, rent shortfalls, property type, and agency borrower limits. Here are the named cases.
Seasoning does not start at the end of the rehab. The clock runs from acquisition or title, not from the day you finish repairs. An investor who finishes a rehab in month three still waits for the seasoning period. Finished work may support a higher appraised value, depending on comps and underwriter review, but it does not shorten the wait.
A lower appraisal hurts more than the percentage miss. Your payoff is fixed, so the cash comes from what is left above it. Run a modeled example in percentages of the original expected value. If the payoff is 60% of value and the cap is 75%, the room is 15% of that value. If the appraisal comes in 5% low, the cap works out to about 71%, and the room falls to about 11%. A 5% miss cut the cash by roughly a quarter.
Equity cleared, coverage did not. Suppose the numbers show plenty of room under the 75% cap, but rent covers the larger payment at only about 0.9x. Here are two paths, and they are different. 1.00 is where many select programs start, so this file fails there. A separate select-lender path takes coverage below 1.00 with leverage and terms adjusted. No-ratio structures are also available, but only through select lenders, generally for borrowers who already own a primary residence. Pricing and leverage differ on both paths.
Clearing 1.00 is not positive cash flow. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. A file at 1.20x can still lose money after a bad turnover.
Agency borrower limits. Agency routes qualify you on personal income and limit how many financed properties you can carry. Investors with many mortgages or thin tax-return income often hit that wall before the LTV cap matters. That is a main reason they look at DSCR.
Property types outside the programs. Manufactured homes, whether single- or double-wide, log homes, and barndominiums are not offered in the network’s DSCR programs. No LTV tier changes that.
Home equity lines. Investment-property HELOC lines cap at $500,000 total. There is no higher investment tier.
What Does the Decision Look Like in Practice?
Start with the question of which loan you can actually use, then check how much cash it yields. For most investors holding several financed rentals or an LLC title, the agency route closes off before the cap matters. A DSCR cash-out refinance then becomes the practical route.
Consider an investor who bought a duplex about eight months ago and added a modest rehab. The title clock is satisfied. Say the appraisal supports a value where the existing payoff is roughly 55% of it. The 75% cap leaves room of about 20% of value before costs. Rent covers the larger payment at about 1.15x, so the coverage test clears. The file then moves to credit, which most programs want near 660, and to reserves of around 6 months of PITIA.
Run it the other way. Say the same duplex rents low, and coverage lands near 0.95x. The investor has three choices.
- Pay down the new loan. A smaller loan lowers the payment and lifts the ratio, but it cuts the cash you pull.
- Use a select-lender path below 1.00. Leverage and terms adjust, so the cash usually shrinks.
- Restructure the term. A 40-year term or an interest-only period, where a select lender offers one, can lift coverage without changing the leverage cap.
A larger down payment on a purchase works the same way: it can lift coverage, but it never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests, with enough equity and enough rental coverage.
If the cap leaves you short, waiting can also help. More seasoning, a stronger appraisal, or a lower payoff all widen the gap. A rate-and-term refinance, which returns no cash at closing, can run up to 85% LTV, but it does not fund a new purchase.
Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction.
The complete DSCR loans guide walks through coverage, leverage, and documents in full. For another angle on the agency side, see Lendmire’s explainer Cash Out On Investment Property Fannie Mae.
Running Your Own Numbers
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. Lendmire is a broker that arranges financing through select lenders in its wholesale network across 41 markets, including Washington, D.C. Any calculator on the site gives an illustrative estimate only. Qualification stays subject to lender guidelines, and nothing here is a commitment to lend.
Frequently Asked Questions
Does Fannie Mae allow cash-out refinancing on an investment property?
Yes, with a lower cap than a primary residence. Market surveys report 75% LTV for one unit and 70% for two to four units. You must also meet the ownership and existing-loan age rules, and you qualify on personal income. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
Do Fannie Mae’s LTV caps apply to a DSCR loan?
No. The agency caps govern only loans sold to Fannie Mae. A DSCR cash-out follows lender guidelines, and across the network it typically tops out at 75% LTV on a standard rental. Short-term-rental collateral typically tops out at 70%.
How long do I have to own the property before I can cash out?
The agency wants a borrower on title for 6 months, and the loan being paid off must be at least 12 months old. DSCR seasoning is set by each lender. About 6 months of ownership is the common expectation in the network. An agency delayed-financing exception can waive the wait for cash buyers, but the loan stays a cash-out.
Can I cash out if rent only just covers the payment?
Possibly, but with less cash. A file near 1.00x is at the floor many select programs use. A separate select-lender path goes below 1.00 with leverage and terms adjusted. Coverage that thin means a smaller loan or a longer term to stay workable.
Does a 1.00 coverage ratio mean the property makes money?
No. DSCR counts rent against PITIA only. Vacancy, repairs, management, utilities, and capital costs are outside the ratio, so a property can clear 1.00 and still lose money in a bad year.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage focused on investor financing, arranging DSCR loans in 40 states plus Washington, D.C. — 41 markets total. Qualification is based on the property’s income rather than personal income documentation, subject to lender guidelines, making it a fit for LLC-held rentals and scaling portfolios. 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
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: Can a BRRRR Investor Refinance a DSCR Loan After Bridge Exit? · How to Cash Out on the Full Value After a DSCR Exit From Hard Money · How Much Equity and Reserves a Rental HELOC Lender Expects
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.