The Quick Read: Fannie Mae allows a cash-out refinance on an investment property, but only on conforming loans sold to the agency, capped at 75% LTV on a one-unit rental, with the existing first mortgage at least 12 months old, a borrower on title for six months, and approval driven by personal income, DTI, and credit. That path suits some investors and shuts out others. A DSCR loan, which qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, is the usual alternative when the agency box doesn’t fit.
- Two clocks run at once. The borrower needs six months on title, and the loan being paid off must be at least 12 months old.
- The cap is 75% LTV on a one-unit investment property. LTV means loan-to-value: the new loan divided by the appraised value. Limited cash-out on a 1-4 unit investment property also tops out at 75%.
- Your personal profile is the file. Income, DTI, and credit decide approval, not the rent.
- There is a portfolio ceiling. The agency limits how many financed properties one borrower can carry.
- Exceptions exist. Delayed financing, inheritance, and court-awarded property each change the waiting rules.
- DSCR loans follow different rules. Most programs in Lendmire’s wholesale network put cash-out at around 75% LTV on a standard rental, with about six months of seasoning as the common expectation.
Key Terms Defined
Conforming loan: a mortgage that meets Fannie Mae’s rules and can be sold to the agency. Only these loans follow its guidelines.
Cash-out refinance: a new, larger mortgage that pays off the old one and hands you the difference in cash.
Limited cash-out refinance: a refinance that pays off the old loan and costs, and returns little or no cash. It is often called rate-and-term.
Seasoning: the waiting period a lender wants before you refinance, counted from title or from the date of the existing loan.
DTI: debt-to-income ratio, which compares your monthly debts to your monthly income.
DSCR: debt service coverage ratio, which divides a property’s rent by its full monthly payment of principal, interest, taxes, insurance, and any HOA dues (PITIA).
Reserves: liquid savings, usually counted in months of payment, that you must hold after closing.
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.
What Do Fannie Mae Guidelines Actually Cover?
They cover conforming loans, nothing else. Fannie Mae does not lend directly. It buys mortgages from lenders, and the lenders follow its rulebook so the loans can be sold.
Rental owners often assume those rules govern every investor loan. They don’t. If a lender isn’t selling the loan to the agency, the agency’s caps and waiting periods don’t apply.
The governing text for this topic is the agency’s Selling Guide section on cash-out refinance transactions. Everything below on seasoning, reserves, and exceptions traces back to it. The agency’s price adjustments, LTV caps, and property limits sit in separate documents, which I’ll point to as we go.
One more distinction matters. Fannie Mae treats occupancy as a hard line. A loan on a home you live in follows one set of rules, and a loan on a rental follows a tighter one. Figures you see for generic cash-out refinances often come from the primary-residence side. They don’t describe a rental.
How Does Underwriting Treat an Investment Cash-Out? Step by Step
The agency path is a personal-profile test with property checks bolted on. Here is how a file moves.
1. You qualify as an individual. The lender runs your income, DTI, and credit through the agency’s automated underwriting system. Rent from the property may help, but your personal numbers drive the decision.
2. The lender checks seasoning. At least one borrower must have been on title for six months before the new loan funds. If an existing first mortgage is being paid off, it must be at least 12 months old, measured from the old note date to the new note date.
3. The lender checks the LTV cap. The Eligibility Matrix shows 75% LTV on a one-unit investment property for cash-out, and 75% for limited cash-out on 1-4 units. Fortune reports that 2-4 unit cash-out caps run lower than the one-unit cap. Confirm the exact row on the live matrix before you plan around it.
4. The lender counts your financed properties. Under the agency’s multiple financed properties rule, the limit for investment transactions is 10 properties on the automated path. It counts properties, not mortgages. A fourplex is one property. Your financed primary residence counts too.
5. The lender checks reserves. The matrix notes that investors with multiple financed properties face additional reserve requirements. On files where DTI exceeds 45%, the Selling Guide calls for six months of reserves.
6. Price adjustments apply. The agency publishes a separate cash-out table of loan-level price adjustments by credit score and LTV. Cash-out on a rental costs more than a plain refinance, and the gap widens as leverage rises.
7. The cash-out amount is what’s left. The new loan minus the payoff and closing costs is your cash. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Picture an investor whose rental appraises well and carries a balance near 45% of value. At the 75% cap, roughly 30 points of value are available before costs. Closing costs come out of that. Whatever remains is the cash.
Where the Rules Bend
The general rule breaks in four named places.
Delayed financing. An investor who bought with cash can refinance within the first six months. The purchase must be documented. The new loan cannot exceed the documented initial investment plus eligible financing costs. The agency lists this as part of the same cash-out section. Fortune also describes it as a common bridge for investors who paid cash and want their money back.
Inherited or court-awarded property. The waiting period doesn’t apply when the property was inherited. It also doesn’t apply when a divorce, separation, or dissolution of a domestic partnership awarded it.
Co-owner buyouts and subordinate liens. The 12-month age requirement doesn’t apply to subordinate liens being paid off. It also doesn’t apply when you buy out a co-owner under a legal agreement.
Limited cash-out. This is a separate test. It carries the same 75% cap for 1-4 unit investment properties, with no 12-month seasoning requirement on the existing loan. Investors confuse the two products often, and they behave differently.
Here’s the catch for the common BRRRR plan (buy, rehab, rent, refinance, repeat). The six-month and 12-month clocks can stall the refinance step. Investors who plan to pull equity out right after renovations should check which clock their situation triggers before they buy.
Can an LLC Take an Agency Cash-Out?
Not as a borrower. Agency loans go to individuals. An older archived version of the guide counted time held by a borrower-controlled LLC toward seasoning. Ownership still had to move out of the LLC and into the individual’s name for the loan to close.
That text is dated. Confirm the current wording before you rely on it. The practical point holds either way: if your rentals sit in an LLC, an agency refinance usually means retitling. Retitling can raise questions on insurance, liability, and your existing loan terms, so plan for it before you commit.
DSCR loans handle this differently. Many programs lend to LLC-titled properties, subject to lender program eligibility, which is a big reason investors with entity-held portfolios look at them.
Where Fannie Mae Isn’t the Fit
Three situations push investors out of the agency box.
- You’re near the property-count ceiling. An investor at 10 financed properties can’t get a new agency investment loan. This is a common reason people move to non-agency products.
- Your personal income is the weak link. Self-employed investors with heavy write-offs, or owners whose DTI is already stretched by existing mortgages, can have strong rental properties and a weak agency file.
- The clocks don’t line up. The 12-month rule on the existing first mortgage blocks a refinance on a recent loan.
A DSCR cash-out flips the question. Instead of asking whether you can afford the payment, the lender asks whether the property’s rent covers it. Here is the comparison, using Lendmire’s network figures on the DSCR side. Everything is subject to lender guidelines, and every file is underwritten individually.
| Factor | Agency cash-out | DSCR cash-out |
|---|---|---|
| Reviewed on | Personal income, DTI | Rent vs. PITIA |
| Cash-out LTV, standard rental | 75% (one-unit) | Around 75% |
| Seasoning | 6 months title, 12-month note | About 6 months common |
| Property count cap | 10 financed properties | Not an agency-style cap |
| Borrower type | Individual | LLC allowed, per program |
| Credit floor | Set per agency and lender | 620 floor; most want 660 |
Across the wholesale network, the pattern is consistent. Most programs want credit around 660, a 620 floor exists in parts of the network, and 700 and above unlocks the strongest leverage tiers. Reserves vary by lender, leverage, loan size, and transaction type. About six months of PITIA is common, and loans above $1,500,000 typically step up to about nine months. For the full picture, the complete DSCR loans guide walks through programs and requirements.
What Does Coverage Mean for a DSCR Cash-Out?
Coverage is rent divided by PITIA. Nothing more. Select programs start at 1.00, meaning rent equals the full payment. Stronger ratios open better pricing and leverage. Separately, a select-lender path takes coverage below 1.00, with leverage and terms adjusted. Those are different paths, not one program with a sliding floor.
Clearing the number does not mean the property cash flows. Repairs, vacancy, management, utilities, and capex all sit outside the calculation. A rental can clear 1.00 and still lose money in a bad year. (Most investors learn this on their first roof.)
Short-term rentals run on their own tiers. Cash-out on short-term-rental collateral tops out at 70% LTV, while cash-out on a standard rental tops out around 75%. Expect a 640+ score, about 12 months of hosting history, and a 1.00 coverage floor on the refinance. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
A larger down payment or more equity lowers the payment and can lift coverage. It never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files clear both tests: enough equity and enough rental coverage.
Some property types fall outside these programs entirely. Manufactured homes (single- and double-wide), log homes, and barndominiums are not offered in the network’s DSCR programs. Loan sizes run up to $3,000,000 on standard programs (smaller balances available through select lenders) through the network, and above $2,500,000 the network generally holds to 30-year fixed structures. Extended terms, interest-only periods, and ARMs are available through select lenders for investors who want them.
How Do You Decide in Practice?
Run two screens, in this order.
Screen one: Can the agency path work for you?
- Do you have a clean, documentable personal income and a manageable DTI?
- Is the existing first mortgage at least 12 months old, or does an exception apply?
- Are you well under the financed-property limit?
- Is the property titled in your name, or can it be?
Four yeses make the agency path worth pricing. Its price adjustments on cash-out mean the cost is higher than a limited cash-out, so compare the total cost of the extra cash, not only the ceiling.
Screen two: Does the property carry itself on paper?
- Does rent cover PITIA at or above 1.00, or at a stronger ratio if you want better pricing?
- Is your credit near 660 or higher?
- Do you have reserves, commonly around six months of PITIA?
- Is the property in an eligible type?
Many investors pass both screens and choose between them. The deciding factors are usually entity ownership, portfolio count, and how much documentation of personal income they want to deal with. Others pass only one, and that settles it.
Here is a genuine toss-up worth weighing. An investor with a strong traditional employment income and two rentals might get better terms from the agency path than from DSCR, since DSCR pricing tends to reflect its flexibility. An investor with eight rentals in an LLC and variable income will usually find the reverse. The better path depends on the file, which is why comparing both beats guessing.
Lendmire, a mortgage broker arranging DSCR investor loans through select lenders across 40 states plus Washington, D.C. (41 markets), sees this split constantly. In files where an investor is already carrying several financed properties, the agency count and reserve overlays tend to become the bottleneck long before the rent does. Running both screens before an application saves the most work.
For more on the agency side, Lendmire’s piece Fannie Mae Cash Out Refinance Investment Property goes deeper on that path. For sizing, the investment cash out refinance Fannie Mae calculator gives an editable, illustrative estimate rather than a quote.
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.
Common Reasons Files Stall
- The clocks. Six months on title and 12 months on the existing loan are separate tests, and passing one doesn’t pass the other.
- Wrong cap. Using a primary-residence LTV to size a rental file. Some pages give 80% for a generic cash-out; that is not an investment-property cap.
- Property count. Forgetting that the financed primary residence counts toward the limit.
- Retitling. Discovering late that the property sits in an LLC.
- Reserves. Planning to use the cash-out proceeds as the reserves.
Frequently Asked Questions
Does Fannie Mae allow a cash-out refinance on a rental property?
Yes, within limits. The Eligibility Matrix shows a 75% LTV cap on a one-unit investment property for cash-out, plus waiting periods, reserve rules, and a financed-property limit. It is available, just tighter than on a home you live in. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
How long do I have to own the property first?
At least one borrower needs six months on title before the new loan funds. If you’re paying off an existing first mortgage, that loan must be at least 12 months old. Delayed financing for cash buyers, inheritance, and court awards change the picture.
Does the 10-property limit count mortgages or properties?
It counts properties. A fourplex is one property, and your financed primary residence counts toward the total. Hitting the limit is a common reason investors turn to DSCR products, where that agency count doesn’t apply.
Do these rules apply to a DSCR loan?
No. DSCR loans are non-agency and business-purpose, so the agency’s caps and waiting periods don’t govern them. In Lendmire’s network, cash-out typically tops out around 75% LTV on a standard rental, with about six months of seasoning common. All of it is subject to lender guidelines.
Can I use an LLC for a Fannie Mae cash-out?
Agency loans go to individuals, so ownership generally has to sit in your own name at closing. Many DSCR programs lend to LLCs, subject to lender program eligibility.
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. The agency’s financed-property count may be the first thing to check before choosing a path.
About Lendmire
A DSCR-focused mortgage broker, Lendmire (NMLS# 2371349) places investor financing across 41 markets — 40 states plus Washington, D.C. — with DSCR eligibility generally reviewed by the lender on property cash flow instead of tax returns, subject to lender guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in 2025 and 2026.
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References
1. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
2. Fannie Mae Eligibility Matrix
3. Fortune, Investment Cash-Out Refinance
This article is part of Lendmire’s DSCR loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Fannie Mae Cash Out Refinance Investment Property LTV · Fannie Mae Guidelines Cash Out Investment Property · Fannie Mae LLC Seasoning Rules for BRRRR Cash-Out Refinance
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.