The Quick Read: Fannie Mae allows a cash-out refinance on a one-to-four-unit rental, but only on loans it buys. It caps a one-unit investment cash-out at 75% LTV, wants about six months on title, and underwrites you on personal income rather than on what the property earns. A DSCR cash-out is a separate track, arranged through select lenders in Lendmire’s wholesale network. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
- Leverage: Fannie’s one-unit investment cash-out tops out at 75% LTV on an investment property. DSCR cash-out tops out around 75% LTV on standard rentals across most of the network.
- Two clocks: Fannie looks at how long you have held title and how old the loan you are paying off is. Most people only plan for the first.
- Income test: Fannie underwrites the file around personal income and debt-to-income. DSCR qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
- Portfolio size: Fannie limits how many financed properties you can carry. DSCR files are reviewed property by property.
Key Terms Defined
You will see these terms throughout. Each is defined once here.
- DSCR (debt service coverage ratio): monthly rent divided by the property’s monthly obligation. A result of 1.25x means the rent is 125% of the payment.
- PITIA: principal, interest, taxes, insurance, and association dues. It is the full monthly cost the rent has to cover.
- LTV (loan-to-value): the loan balance divided by the property’s appraised value.
- DTI (debt-to-income): your total monthly debts divided by your monthly personal income. Agency underwriting leans on it heavily.
- Cash-out refinance: a new first mortgage that pays off the old one and hands you the extra equity as cash.
- Limited cash-out refinance: a refinance that returns only a small amount of cash. Agencies treat it as a different, easier product.
- Seasoning: the waiting period a lender wants before you can refinance. It can be measured from when you took title or from when the existing loan began.
- Delayed financing: an exception that lets a cash buyer borrow against a property soon after purchase, instead of waiting out the normal title clock.
- Reserves: liquid savings a lender wants you to hold after closing, usually counted in months of PITIA.
- Financed properties: the number of properties with a mortgage in your name. Agency caps count these, not loans.
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
Prefilled with starting assumptions — enter your property’s value, balance, taxes, and insurance for a more accurate picture.
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.
Does Fannie Mae Allow Cash-Out on an Investment Property?
Yes, with conditions. Fannie Mae permits cash-out refinances on non-owner-occupied one-to-four-unit rentals. The governing text is Fannie Mae Selling Guide B2-1.3-03, and it applies only to loans sold to Fannie Mae. A DSCR loan is not an agency product, so none of these rules govern one.
The transaction has to pay off the existing mortgage with a new first mortgage on the same property. It can also be a new mortgage on a property you own free and clear.
The leverage limit is where investors feel the difference. Fannie’s eligibility matrix shows a 75% maximum LTV on a one-unit investment-property cash-out refinance. That compares with 80% on a one-unit primary-residence cash-out and 75% on a one-unit second home. The matrix also lists a 75% limit for limited cash-out on a one-to-four-unit investment property. Multi-unit cash-out limits differ from the one-unit row, so check the current matrix before you plan around a figure.
For comparison, most DSCR cash-out files in Lendmire’s network also top out around 75% LTV on standard rentals. The number looks alike, but the way you earn it is very different. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
How Underwriting Treats the File, Step by Step
Here is the agency sequence, in the order a loan officer works through it.
1. Count financed properties. On an investment-property loan, the subject property counts toward a ten-property limit. The cap counts properties with financing, not loan files, as this BiggerPockets discussion of the ten-property rule explains.
2. Check seasoning. You need time on title, and the loan being paid off needs enough age. The next section covers both.
3. Appraise and document rent. When a property produces rent, the appraiser uses a one-unit rent schedule form or a two-to-four-unit operating income form. A mortgage-industry guideline explainer on rental income names them as Form 1007 and Form 1025.
4. Qualify on personal income. Conventional underwriting runs on your income, credit history, and DTI. The property’s rent supports the file, but you carry it.
5. Discount the rent. Agency underwriters generally count only part of documented rent, to allow for vacancy and expenses. Whether extra rent can also add to your qualifying income depends on your landlord experience.
6. Size the loan. The result is capped by LTV, credit-score tiers, and pricing adjustments. An investment property always sizes smaller than a primary residence would.
Reserves enter the picture through DTI. On loans run through Fannie’s automated underwriting, a DTI above 45% triggers a six-month reserve requirement on a cash-out refinance, per the same Selling Guide section. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
On the DSCR side, the steps are shorter. The lender compares rent used for lender review to PITIA, checks credit, confirms reserves, and applies the leverage cap. Across the network, reserves commonly run about 6 months of PITIA. Files above $1,500,000 typically step up to about 9 months. Reserves vary by lender, leverage, loan size, and transaction type, so treat that as a typical range.
The Two Seasoning Clocks
This is where most investors get tripped up. Fannie runs two separate clocks, and the DSCR network runs a simpler one.
Clock one is title. At least one borrower must have been on title for at least six months before the new loan’s disbursement date. The guide lists exceptions, such as time in a revocable trust counting toward the six months.
Clock two is the age of the loan you are paying off. Fannie’s guidance says an existing first mortgage being paid off should be at least 12 months old, measured from the existing note date to the new note date. That does not apply to subordinate liens being paid off, or to co-owner buyouts.
Picture an investor who bought a rental with a mortgage and has held it for 8 months. Title seasoning is satisfied. The loan is only 8 months old, so the second clock is not. The investor waits, even though the property may have appreciated well.
Short-term bridge or hard-money notes deserve a flag. Whether paying one off trips the 12-month clock depends on how the lender reads the guide, so ask before you build a plan around it.
On the network side, cash-out generally looks at about 6 months of ownership, measured from title recording. Program details vary by lender and every file is reviewed individually.
Which clock am I on?
- Held title under six months, bought with cash: look at delayed financing, covered below.
- Held title six months or more, existing first mortgage under 12 months old: the agency note-age clock may still apply.
- Inherited the property or received it in a divorce: exceptions have historically existed. Confirm against the current guide text.
- Property currently listed for sale: the guide has historically treated this as ineligible for a cash-out. Confirm the current wording first.
Where the General Rule Breaks
Delayed financing for cash buyers. The Selling Guide allows a quicker cash-out after a cash purchase. The new loan can be no more than your documented initial investment plus closing costs and prepaid fees, subject to the maximum LTV on current appraised value. The original purchase must also have been arms-length.
This matters for BRRRR investors, meaning buy, rehab, rent, refinance, repeat. The exception is built around recouping the cash you put in. Rehab spending is not clearly recognized in it, so do not assume renovation dollars count.
Limited cash-out is not cash-out. A limited cash-out refinance returns only minimal cash. Paying off subordinate liens that were not part of the purchase financing converts the deal to a full cash-out. The separate rule is the limited cash-out section of the Selling Guide.
Entity ownership. Agency borrowers are generally individuals rather than LLCs. If your rental sits in an LLC, expect to deed it out of the entity before an agency refinance, and confirm the current rule with your loan officer. DSCR programs commonly allow LLC vesting, subject to lender program eligibility.
Property types. DSCR on manufactured homes (single- and double-wide), log homes, and barndominiums is not offered in the network. Those are separate from agency eligibility, which has its own property rules.
Short-term rentals. Agency appraisal forms were not built around short-term rental income. On the network side, short-term rental collateral carries its own tiers: cash-out tops out at 70% LTV on short-term rental collateral, while a standard rental allows 75%. Expect a 640+ score and about 12 months of hosting history. The coverage floor on a short-term-rental refinance is 1.00. 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. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Reserves and the Ten-Property Cap
Fannie’s ten-property limit applies when the subject is an investment property or second home. A primary-residence loan does not face the same numeric cap. Because the cap counts financed properties, a portfolio of ten rentals with ten separate mortgages hits it. A portfolio of ten rentals, six of them owned free and clear, does not.
For an active investor, this is the usual breaking point. Each new purchase or refinance pushes you toward the ceiling, and the closer you get, the more careful the agency track becomes. DSCR files do not carry that cap, because the lender is looking at the property rather than counting your mortgages.
DSCR Cash-Out: The Other Track
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. The file qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
Here is how the two tracks line up on a one-unit rental.
| Factor | Fannie Mae track | DSCR network track |
|---|---|---|
| How you qualify | Personal income and DTI | Rent covering PITIA |
| Cash-out LTV cap | 75% on one-unit investment | About 75% on standard rentals |
| Title seasoning | 6 months on title | About 6 months from recording |
| Reserves | 6 months if DTI tops 45% | Commonly about 6 months PITIA |
| Vesting | Generally individuals | LLC possible, per program |
These are the figures the network typically sees.
Coverage is where DSCR files get picky. For many select programs, 1.00 is where eligibility starts. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Stronger ratios open better pricing and higher leverage.
Credit works in tiers. A 620 floor exists in parts of the network, most programs want around 660, and 700+ unlocks the strongest leverage tiers. Loan amounts run up to $3,000,000 on standard programs. Smaller balances route through select lenders in the network.
The spine of the term structure is the 30-year fixed. Extended terms and interest-only periods are available through select lenders, and ARM structures exist for investors who want them. Above $2,500,000, the network generally holds to 30-year fixed.
One caution. DSCR compares rent to PITIA only. Clearing 1.00 is not the same as positive cash flow. Repairs, vacancy, management, utilities, and capital expenses all sit outside the calculation.
For more on how these loans work, see the complete DSCR loans guide. Lendmire’s cash out investment property Fannie Mae covers the agency side in more depth.
A Worked Example, in Ratios
Say you own a duplex that you bought 8 months ago with a mortgage. Rent covers the current PITIA at roughly 1.25x. Your traditional personal-income documentation shows heavy depreciation and write-offs, so your reported income looks thin.
On the agency track, three things happen. Your title seasoning is met, but the existing loan is only 8 months old. Your personal DTI looks worse than the property actually performs. If DTI lands above 45%, reserves also step up.
On the DSCR track, the lender looks at the rent against the new PITIA, your credit tier, and your reserves. The most you can pull out is bounded by the 75% LTV ceiling on standard rentals, the reserve requirement, and the coverage ratio after the new balance is in place. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Here is the catch. A larger loan raises PITIA, so coverage falls. A duplex that clears 1.25x today could land near 1.00x after cash-out. Equity available depends on rent used for lender review, PITIA, reserves, and the leverage ceiling, so it is not a guaranteed cash figure. An editable, illustrative calculator can help you test the tradeoff, but it is an estimate rather than a quote.
For the reverse scenario, say you paid cash for a rental and want your money back quickly. Delayed financing may fit, but the loan is limited to documented investment plus closing costs. If you put real money into renovation, expect the lender to treat that carefully.
Which Track Fits Your File?
The honest answer is that the agency track fits some investors well. If you have steady traditional employment income or clean traditional personal-income documentation, a seasoned first mortgage, a title in your own name, and a portfolio under the property cap, an agency cash-out can make sense.
DSCR tends to fit better when any of the following apply.
- You hold properties in an LLC, subject to lender program eligibility.
- You are near or past the financed-property cap.
- Your traditional personal-income documentation understates how the portfolio actually performs.
- The loan you would be paying off is younger than the agency note-age rule allows.
The tradeoff runs both ways. DSCR loans can carry higher costs than comparable conventional loans, which is why a cash-out has to make sense on the property’s own numbers. 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.
Frequently Asked Questions
Can you do a cash-out refinance on a rental with Fannie Mae?
Yes. Fannie permits cash-out on non-owner-occupied one-to-four-unit properties. The one-unit investment limit is 75% LTV, and you need time on title and a seasoned existing loan. Multi-unit limits differ, so check the current matrix. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
What is the difference between title seasoning and loan age?
Title seasoning counts how long you have owned the property, with six months as the baseline. Loan age counts how old the existing first mortgage is, generally 12 months from note date to note date. Different exceptions apply to each.
Does the ten-property limit mean ten loans?
No. It counts financed properties, including the subject. Several loans on one property do not multiply the count, and unencumbered properties do not add to it.
Can an LLC borrow on a Fannie Mae cash-out?
Agency borrowers are generally individuals, so a property in an LLC usually has to move into your name first. Confirm the current rule with your lender. DSCR programs commonly allow LLC vesting, subject to program terms.
When does a DSCR cash-out make more sense than the agency route?
It tends to fit when your income is hard to document, your portfolio is large, or the property is held in an entity. The file is built around the property’s rent covering PITIA. The leverage ceiling stays around 75% LTV on a standard rental cash-out. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Next Step
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. Reach the team at 828-256-2183, or request a quote. Lendmire is a broker arranging financing through select lenders in its wholesale network, across 41 markets including Washington, D.C. This is not a commitment to lend, and every file is subject to lender guidelines.
The investor who wins on a cash-out is the one who picks the track before checking the clock, because the same equity can be reachable on one path and stuck on the other.
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
A non-QM mortgage broker (NMLS# 2371349), Lendmire arranges DSCR financing for real estate investors in 41 markets — 40 states plus Washington, D.C. Because deals are underwritten primarily on property cash flow rather than personal income documentation, the structure suits self-employed buyers and entity-owned portfolios. Lendmire places loans through wholesale investor lenders; it is not a direct lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide B2-1.3-03
2. Fannie Mae Eligibility Matrix
3. BiggerPockets: Fannie Mae 10 Property Financing Rule
4. Mortgage-industry guideline explainer on rental income (B3-3.1-08)
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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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.