The Quick Read: Yes. The ceiling depends on how you use the home and how many units it has. A one-unit primary residence tops out at 80% loan-to-value on a cash-out refinance. Two- to four-unit primary homes and second homes sit at 75%.
That 80% figure is the best case, not the standard case. Many homeowners assume it applies to any property they own. It does not.
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: 7.32% as of October 22, 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.
What Are the Cash-Out LTV Limits by Property Type?
The limit steps down as the home gets less like your own single-family residence. Freddie Mac publishes the maximums in Section 4203.1 of its Seller/Servicer Guide, and the same table appears on its public single-family page. Here is how the limits look across the wholesale programs Lendmire places files with:
| Property type | Cash-out max LTV |
|---|---|
| 1-unit primary residence | 80% |
| 2- to 4-unit primary residence | 75% |
| Second home | 75% |
| Investment property | 75% |
One note on that last row. Freddie Mac’s own table separates investment properties by unit count, so a multi-unit rental can sit below a one-unit rental. Check the current Guide before relying on a number, because sections get revised.
All of these figures are subject to lender guidelines and full file review. None of this is a commitment to lend.
Freddie Mac says the cash-out caps apply to both automated and manually underwritten loans. They apply at all eligible loan amounts, super conforming loans included.
Fannie Mae’s cash-out limits are broadly similar by property type. The two agencies differ in details, such as how each counts the six months of ownership, manufactured housing, and lender overlays. Fannie Mae’s Eligibility Matrix is its source of truth.
How Is LTV Calculated on a Cash-Out Refinance?
LTV is the new loan divided by the appraised value of the home. On a refinance, only the appraisal counts. What you paid years ago does not matter. Freddie Mac’s cash-out refinance product page says a new appraisal and inspection report is required.
Two details trip people up.
The limit covers all liens, not just the first mortgage. Lenders look at the total of every loan secured by the home. That measure is called TLTV (total loan-to-value). If a second mortgage stays in place, it counts against the same cap as your new first mortgage.
A home equity line counts at its full limit. The version of the ratio that includes a line of credit is called HTLTV. It counts the whole credit limit, even if you have not borrowed from it. An unused line of credit still takes up room under the cap.
The ratio rounds up. The Guide rounds the calculated ratio up to the next whole number. A 94.01% ratio becomes 95%. On a file sitting right at the cap, that rounding decides the outcome.
What Counts as a Cash-Out Refinance?
A cash-out refinance is a mortgage with no restriction on how you spend the proceeds. Anything beyond a small amount of cash back at closing can trigger cash-out treatment. The label itself changes the leverage.
A rate-and-term refinance is the limited version. The new loan pays off your existing first mortgage, the closing costs and any purchase-money second lien. Across the wholesale programs Lendmire works with, that lane reaches 95% LTV on a one-unit primary residence. The cash-out lane stops at 80% on the same house. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
That gap of 15 points is the cost of taking cash. Lenders view a bigger loan against the same home as more risk, so they cap it lower.
Why Does Property Type Change the Limit?
The limit tracks how likely the borrower is to keep paying if money gets tight. A person living in the home has the most to lose, so a one-unit primary residence gets the highest cap.
A two- to four-unit home brings extra moving parts: tenants, vacancies, and a bigger building. A second home is the payment people tend to stop first in a squeeze. A rental property sits at the far end of that scale.
The agencies also see more losses on these loans when values fall. Lower caps leave a bigger equity cushion for the lender. That is the whole logic. It is a risk ladder, and the cap steps down each rung.
The Same Home Under Different Uses
Take one home with the same appraised value and the same existing loan. Say the balance owed equals 60% of the appraised value. Only the use of the property changes.
| Use of the home | Cap | Room before costs |
|---|---|---|
| 1-unit primary residence | 80% | 20 points of value |
| 2- to 4-unit primary residence | 75% | 15 points of value |
| Second home | 75% | 15 points of value |
“Room before costs” is the cap minus what you owe. Your closing costs, prepaid items and any other liens come out of that room. What is left is your cash. So the amount you actually receive is smaller than the headroom.
The takeaway: moving a home from primary to second-home status shrinks the cap and can shrink or erase your cash-out.
What Else Decides Whether You Get Cash Out?
The LTV cap is one gate, not the whole approval. The lowest of these limits governs your file:
- The LTV cap for your property type
- Your credit score
- Your debt-to-income ratio
- Your cash reserves
- Any extra rules a lender adds on top
Across the wholesale conventional programs Lendmire places files with, the decision score starts at 620. The automated finding governs most files, with a total ratio ceiling of 50%. Mortgage insurance applies above 80% LTV on conventional loans. A cash-out refinance at or under 80% does not carry it.
Hitting the cap does not mean you are approved. Credit, income, property condition and condo review can each trim the loan.
Seasoning and Ownership Rules
Seasoning is the waiting period a lender wants before you can refinance. For a conventional cash-out refinance, the first mortgage being paid off must be at least 12 months old, counted note date to note date. You also need to have been on title for six months.
Three exceptions exist. They are delayed financing, inheritance and legal awards.
Delayed financing lets a cash buyer take cash out inside the first six months, with the source of the purchase funds documented. It is an exception to the waiting period only. The loan is still sized and priced as cash-out, with the same LTV caps. Freddie Mac’s product page lists no seasoning requirement for inherited property.
Freddie Mac also points to Guide Section 4301.6 for special-purpose cash-out, such as buying out a co-owner.
Occupancy Counts
On a primary-residence cash-out loan, every borrower on the loan must live in the home. Occupancy is also the dividing line for the whole table above, so it needs to be accurate.
Condos, Co-ops and Manufactured Homes
Some property types follow their own rules. Freddie Mac’s page lists products with LTV rules elsewhere in the Guide. These include manufactured homes, Home Possible, loans after a prior foreclosure, and condo projects under streamlined review.
Manufactured homes usually sit under a lower cash-out cap than a site-built home. Fannie Mae has its own manufactured housing matrix, and single-width homes have a separate cash-out limit. Fannie Mae also restricts cash-out on second-home co-ops. If you own one of these property types, ask for the specific cap before you plan around a number.
Is There a Way to Reach 89.99% LTV Without Mortgage Insurance?
Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
For some borrowers, yes. One wholesale lane reaches 89.99% LTV with no mortgage insurance. It requires a 680 score, a 50% ratio and a thirty-year fixed rate. It also requires a primary residence, a conforming balance and six months of seasoning. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
This lane does not follow the standard agency cash-out table, so ask about it directly. It is not written in Texas, where a cash-out on the homestead is capped by the state constitution at the agency figure.
What If Your LTV Is Too High?
You have a few practical moves:
1. Wait. Payments reduce your balance over time. Home values also move, so a new appraisal later may change your ratio.
2. Pay the balance down. A lump sum brings the ratio under the cap.
3. Resize the request. Taking less cash can bring the loan under the limit.
4. Check your other liens. A second mortgage or an unused line of credit may be consuming room. Paying it off or closing it can change the math.
5. Look at the use of the home. A lower cap for a second home or multi-unit property is a fact of the program. Other loan types may fit better.
Lendmire’s piece How Property Type and Occupancy Change a Cash-Out Refinance goes deeper on this step-down.
What Should You Weigh Before Taking Cash Out?
The bigger loan is the point, and also the catch. The Consumer Financial Protection Bureau says a cash-out refinance may stretch out your payoff time and may raise your monthly payment, because a larger loan replaces the current one. It also resets your interest rate and terms. That is in the CFPB’s guide to using home equity.
A lower rate does not guarantee a lower payment. If the balance grows, the payment can rise even when the rate falls.
Turning other debts into mortgage debt also puts your home behind them. The CFPB’s research on cash-out refinances and non-mortgage debt warns that the home can be at risk of foreclosure if payments become unsustainable.
The CFPB’s report on cash-out borrowers found that paying off other debts was the most common use of the money. Home repairs and construction came next. Those are sensible uses, if the new payment fits your budget.
Higher LTV and cash-out status generally cost more. Review the Loan Estimate and Closing Disclosure side by side to compare real costs.
Common Myths About Cash-Out LTV
- “80% applies to every property.” It applies only to a one-unit primary residence.
- “Cash-out equals 80% minus what I owe.” Payoffs, fees, prepaid items and other liens reduce what you receive.
- “An unused HELOC does not count.” The full credit limit counts toward HTLTV.
- “Freddie Mac and Fannie Mae are totally different.” The caps are broadly similar. The details differ.
- “Delayed financing is an easier loan.” It waives a waiting period. It does not lift the cap.
- “Hitting the cap means approval.” Credit, income and property review still apply.
Key Terms Defined
LTV (loan-to-value): The loan amount divided by the home’s appraised value.
TLTV (total loan-to-value): The same ratio, counting every loan secured by the home.
HTLTV: TLTV with any home equity line counted at its full credit limit, drawn or not.
Cash-out refinance: A new mortgage that pays off the old one and lets you keep extra cash, with no restriction on its use.
Seasoning: The waiting period before you can refinance or take cash out.
Delayed financing: An exception that lets a cash buyer take cash out before the six-month ownership period ends.
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. Start with Lendmire’s cash-out refinance programs to see what fits your home and your goals. Lendmire is a mortgage broker that arranges loans through wholesale lenders.
Frequently Asked Questions
Does Freddie Mac’s cash-out limit change for a duplex I live in?
Yes. A two- to four-unit primary residence is capped at 75%, compared with 80% on a one-unit primary home. The unit count lowers the limit even when you occupy part of the building.
Does my existing HELOC reduce how much cash I can take?
It can. Any second lien that stays in place counts toward the total loan-to-value cap. An unused credit line still counts at its full limit, so closing or paying it off can free up room.
Can I do a cash-out refinance right after buying with cash?
Possibly. Delayed financing lets a cash buyer take cash out before the six-month ownership period ends, with the source of purchase funds documented. The loan is still treated as cash-out, so the same LTV caps apply.
Is a cash-out refinance the same as a rate-and-term refinance?
No. A rate-and-term refinance only pays off your existing first mortgage, closing costs and a purchase-money second lien, with minimal cash back. On a one-unit primary residence it reaches 95% LTV, against 80% for cash-out. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
If my loan fits under the cap, am I approved?
No. The cap is one gate. Your credit score, debt-to-income ratio, reserves, property condition and lender overlays also shape the final loan. Everything is subject to lender guidelines and full file review.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Lendmire arranges FHA, VA, conventional and jumbo purchase and refinance loans through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Freddie Mac Seller/Servicer Guide, Section 4203.1
2. Freddie Mac: Maximum LTV, TLTV and HTLTV Ratio Requirements
4. Freddie Mac: Cash-Out Refinance product page
5. CFPB: Using Your Home Equity guide
6. CFPB: CFPB Cash Out Refinances and Paydown Behavior of Non Mortgage Debt Balances
7. CFPB: CFPB Report Finds Cash Out Mortgage Refinance Borrowers Improve Credit Scores
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Refinance a Conventional Loan on Thin Equity in Year One · Does a Fannie Mae No Cash Out Refinance Allow Any Cash Back? · How to Lower a High Payment With a Conventional 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
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.