The Quick Read: The standard conventional cap is 80% of your home’s value on a one-unit primary residence, and only a few programs go past it. A VA cash-out reaches highest, but only for eligible veterans and service members. One wholesale conventional lane reaches 89.99% with no mortgage insurance, if your credit and ratios are strong. Other programs that look like they go higher, such as limited cash-out and the streamlines, barely pay out any cash. All figures are subject to lender guidelines and full file review.
Key Takeaways
- The standard cash-out cap is 80% on a one-unit primary home and 75% on two- to four-unit homes, second homes, and investment property.
- Going above the cap means choosing a different product. Each one trades something away.
- A wholesale conventional lane reaches 89.99% with no mortgage insurance. It requires a 680 score, a 50% ratio, a thirty-year fixed loan, a primary residence, and a conforming balance.
- VA cash-out has a much higher ceiling than conventional. Many lenders set their own lower limit.
- Limited cash-out reaches 95% to 97%, but it is a rate-and-term loan with only incidental cash back.
- Nothing here is a commitment to lend. The appraisal, credit, and payoffs can all shrink your result.
What Does LTV Mean on a Cash-Out Refinance?
LTV is the new loan amount divided by your home’s appraised value. A higher LTV means you borrow more of the home’s value and keep less equity.
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: 7.40% as of October 15, 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.
Say your home appraises at $400,000, and you owe 50% of it, or $200,000. A cash-out refinance replaces that loan with a bigger one. At an 80% cap, you can borrow up to 80% of value, or $320,000. Your cash is what’s left after the payoff, other liens, and closing costs. The lender calculates that figure, and it is almost always smaller than the headline cap.
Why is the cap lower than on a normal refinance? Taking cash out is riskier for the lender. Borrowers who pull equity default more often than borrowers who only change their rate or term.
That gap is the price of taking cash. It is also why the question “how do I go higher?” has a different answer than most people expect.
What Is the Standard Ceiling, and Does Occupancy Change It?
The standard conventional ceiling is 80% on a one-unit primary residence. It drops to 75% for two- to four-unit primary homes, second homes, and investment property. Occupancy decides the leverage, so the home’s use matters before anything else.
| Property and use | Standard cash-out cap |
|---|---|
| 1-unit primary residence | 80% |
| 2–4-unit primary residence | 75% |
| Second home | 75% |
| Investment property | 75% |
Manufactured homes sit lower still. Conventional cash-out on a manufactured home is capped well below the site-built figure, and lender guidelines change, so confirm the current limit with your loan officer.
Which Programs Go Above the Standard Cap?
Several routes get you above 80%, and they work in very different ways. Only some of them put real cash in your hand. Here they are, from most cash to least.
VA cash-out: the highest ceiling
A VA cash-out refinance has a far higher ceiling than any conventional loan. It lets an eligible borrower replace the current mortgage and take cash out. It can also move a non-VA loan, such as a conventional or FHA mortgage, into a VA-backed one.
The VA’s cash-out loan page lists the conditions. You need a Certificate of Eligibility. You must meet VA and lender credit and income standards. And you must live in the home.
Here’s the catch. The VA sets the program ceiling, not the lender. Many lenders apply their own lower limit, called an overlay. So “VA allows nearly full value” does not mean your loan will reach it. The VA funding fee also applies unless you are exempt, and it counts toward the total loan.
A homeowner with an FHA or conventional loan who qualifies for VA benefits can use this route to go well above the conventional cap. Without VA eligibility, it is closed to you.
The wholesale conventional lane to 89.99%
This is the route most conventional borrowers don’t know about. Across the wholesale programs Lendmire places files with, one lane reaches 89.99% LTV on a cash-out with no mortgage insurance. It is narrow, and the conditions stack up. Every figure here varies by lender and program, and guidelines, property type, leverage, and credit profile all apply.
- A 680 decision score or higher.
- A total debt ratio of 50% or lower.
- A thirty-year fixed-rate loan.
- A principal residence.
- A conforming loan balance.
- Six months of seasoning specific to this lane.
Miss one condition and you fall back to the 80% standard. Texas has its own rule. A cash-out on a Texas homestead is capped by the state constitution at the agency figure, so this wholesale lane is not written there.
Is 89.99% worth chasing? It depends on how much equity you can spare. The lane skips mortgage insurance, which is its main draw. But a loan at nearly 90% leaves a thin cushion, and the file is reviewed closely. You can learn more about how Lendmire arranges cash-out refinance programs.
Limited cash-out: higher number, not much cash
Limited cash-out is also called rate-and-term. It reaches 95% LTV on a one-unit primary residence. The ceiling is 97% when the existing loan is agency-owned and the first-time-buyer program allows it. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
It looks like the answer, but it isn’t a true cash-out loan. The new loan pays off the existing first mortgage, the closing costs, and a purchase-money second lien. You can receive only incidental cash back. Fannie Mae’s limited cash-out guidance spells out the cash-back limits and the extra requirements in the highest LTV band.
Mortgage insurance applies above 80%. This route suits a homeowner who wants a lower payment or a shorter term, not a large payout.
Streamlines: almost no equity test, almost no cash
The FHA Streamline and the VA IRRRL are for people who already hold an FHA or VA loan. They have almost no equity test. There is no meaningful cash payout either.
- FHA Streamline: the existing loan must be FHA-insured and current, and the refinance must show a net tangible benefit. HUD’s streamline page lists the conditions. No appraisal, with limited credit review.
- VA IRRRL: it applies to an existing VA loan. It carries a 0.5% funding fee unless you are exempt. There is no VA appraisal and a net tangible benefit is required. It must also meet a seasoning requirement.
A streamline can’t pull cash. If cash is the goal, skip these.
Jumbo lanes
Above the conforming loan limit, jumbo programs take over. They run at a 660 decision score, leverage to 90%, loans to $5,000,000, and a 50% ratio ceiling on the fixed lanes. Your lender’s guidelines for cash-out versus rate-and-term can differ, so the leverage on a cash-out jumbo may sit lower than these ceilings.
How Do the Routes Compare Side by Side?
Here is the quick map. Every figure comes from the program tied to it, and it is subject to lender guidelines.
| Route | Reaches | Real cash? | Mortgage insurance |
|---|---|---|---|
| Standard conventional cash-out | 80% (1-unit primary) | Yes | Not needed at or below 80% |
| Wholesale conventional lane | 89.99% | Yes | None in this lane |
| VA cash-out | Far higher; lender overlays apply | Yes | VA funding fee instead |
| Limited cash-out | 95% (97% in some cases) | Incidental only | Above 80% |
| FHA Streamline / VA IRRRL | No equity test | None meaningful | FHA premiums; IRRRL fee |
Mortgage insurance is an ongoing monthly cost on top of your loan. Published typical annual premiums run 0.58% to 1.86% of the balance. That is a range, not a quote. For a deeper look at what insurance adds above the cap, see Lendmire’s piece How Much Mortgage Insurance a Cash-Out Refinance Adds Above the Cap.
How Is a Cash-Out Underwritten, Step by Step?
The underwriting follows seven steps, and each one can lower your final number. Walk through them in order.
1. Pick the product by goal. You are choosing cash-out, rate-and-term, or limited cash-out. The purpose of the loan sets the ceiling.
2. The appraisal sets the denominator. LTV is the new loan divided by appraised value. A low appraisal shrinks the loan you qualify for. A streamline skips the appraisal, which is why it has no equity test.
3. Every lien counts. Lenders measure total LTV, so a home equity line or second mortgage that stays in place uses up room under the cap. A second lien does not get you past the cap.
4. Payoffs and costs come out. Cash to you is the maximum loan minus your payoff, other liens, closing costs, and prepaid items. Rolling closing costs into the loan raises your LTV and can push you over a limit.
5. Seasoning gates. On a conventional cash-out, 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 6 months. Delayed financing, inheritance, and legal-award exceptions exist.
6. Full underwriting. Credit, income, and total debt ratio are reviewed. The automated finding governs most files, with a total ratio ceiling of 50%. Manually underwritten loans use 36% or 45% with reserve and score factors. The wholesale conventional programs start at a 620 decision score. Pricing and available terms vary by lender, borrower profile, property type, and full underwriting review.
7. Mortgage insurance or funding fee. Above 80% on a conventional loan, mortgage insurance applies. On a VA cash-out, the funding fee can be financed but counts toward the total loan.
Practitioners see the same pattern again and again. The cap is rarely what stops a cash-out. The appraisal or the payoff usually does. A borrower who expects 80% of a hoped-for value often finds that a lower appraisal, plus a payoff and costs, leaves much less cash than planned.
Where Does the General Rule Break?
The 80% rule has named exceptions. Know which one is yours before you pick a program.
- Unit count and occupancy. The highest cap goes to a one-unit primary residence. Everything else steps down to 75% on the standard lane.
- Manufactured homes. The conventional cash-out cap is far lower.
- Non-VA to VA. A VA-eligible borrower with a conventional or FHA loan can use VA cash-out to go above conventional caps.
- FHA cash-out. FHA caps cash-out below its rate-and-term limit. Older sources quote a higher figure that no longer applies, so check the current FHA limit with a loan officer.
- FHA streamline on a non-owner-occupied property. It is allowed only without an appraisal.
- Texas. The homestead cash-out is held to the agency figure by the state constitution.
- Older high-LTV refinance programs. The programs once built for borrowers with little equity are no longer a dependable option. Confirm availability before counting on one.
Credit events also matter. The agencies set waiting periods: four years from a chapter 7 discharge, seven from a foreclosure, and four from a short sale or deed-in-lieu. Documented extenuating circumstances can shorten them.
What Does a Higher LTV Really Cost You?
Higher LTV costs you equity, a bigger loan balance, and usually more cost on the loan itself. Every route above 80% trades something away. The cost is not always a fee.
The CFPB‘s guide to using home equity notes that lenders typically require you to keep some equity. It also says a cash-out refinance can lengthen your payoff time and raise your monthly payment, because you replace your mortgage with a larger loan. Closing costs usually apply, and your rate and terms change.
In plain terms, here is what that means for you:
- Less equity left. A smaller cushion matters if prices dip or you need to sell. You rebuild equity slowly because the balance falls more slowly on a long loan.
- Mortgage insurance above 80%. Federal law lets you request cancellation at 80% of original value, with a good payment history, no subordinate liens, and no decline in value. The servicer must end it automatically at 78%. The wholesale 89.99% lane has no mortgage insurance at all.
- Debt consolidation risk. Paying off credit cards with mortgage money can lower your monthly payments. It also secures that old debt with your home. CFPB research found many cash-out borrowers pay down other debts with proceeds. It cautions that this can raise foreclosure risk.
- A fresh start on the loan. If you hold a low-cost first mortgage today, replacing it may cost you more than the cash is worth.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Which Route Fits You?
Match your situation to the lane, not the other way around.
| If you are… | Look at… |
|---|---|
| A veteran or service member with a VA entitlement | VA cash-out |
| A primary-home owner with strong credit and a conforming balance | The 89.99% wholesale lane |
| A homeowner who only wants a better term | Limited cash-out |
| A current FHA or VA borrower with no cash need | Streamline or IRRRL |
| A homeowner whose balance is above conforming limits | Jumbo programs |
Picture a homeowner with a 700 score, a 40% total ratio, and a thirty-year fixed loan on a primary residence. Her balance is conforming, and she has owned the home well past six months. She may fit the 89.99% lane, subject to lender guidelines. Change one fact, such as a second home or a jumbo balance, and the answer changes too.
Choosing between the 89.99% lane and a lower cap is a real toss-up for many borrowers. A higher LTV means more cash now. Staying at 80% leaves a thicker equity cushion and fewer moving parts in the file. Neither is wrong. The right pick depends on what the cash is for.
What Are the Alternatives If You Can’t Get Above the Cap?
A home equity line or home equity loan can reach equity without replacing your first mortgage. Taking equity out leaves you owning less of your home, and these loans are an alternative worth weighing.
If your current first mortgage is a good one, a second loan can leave it in place. The combined balance still counts toward total LTV, so it won’t beat the cap. It can, however, let you borrow without touching the first loan.
A refinance paired with a separate second loan is a third option. It is more paperwork, and both loans are reviewed under their own guidelines.
Why Do High-LTV Requests Get Declined or Reduced?
A request usually shrinks for one of these reasons:
- The appraisal comes in low. The cap applies to the real value, not the one you expected.
- Financed costs push the loan over. Rolling costs into the balance can cross a limit.
- Seasoning isn’t met. The loan being paid off or the time on title is too short.
- Credit or ratios fall short. A 679 score misses a 680 lane by one point. A ratio even slightly above the program’s ceiling misses it the same way.
- A subordinate lien stays in place. It eats up combined LTV.
- Occupancy or property type changes the cap. A second home or a two- to four-unit property steps down to 75%.
- The state is restricted. Texas homestead rules are the best-known case.
Key Terms Defined
LTV (loan-to-value): the new loan amount divided by your home’s appraised value.
Cash-out refinance: a new, larger mortgage that pays off your old one and gives you the difference in cash.
Limited cash-out refinance: a rate-and-term loan that allows only incidental cash back, mostly to cover costs.
Seasoning: the waiting period required before a loan can be refinanced or a borrower can use equity.
Mortgage insurance: a monthly cost on conventional loans above 80% LTV that protects the lender, not you. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
Overlay: a lender rule stricter than the program’s own limit, such as a lower VA cash-out ceiling.
Streamline refinance: an FHA or VA refinance of an existing government loan with minimal documents and no meaningful cash out.
What Is the Next Step?
Start with your goal and your occupancy. Then check your seasoning, your score, and your debt ratio against the lanes above. 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. Nothing here is a commitment to lend, and every program is subject to lender guidelines and full file review.
Frequently Asked Questions
Can I cash out 90%, 95%, or 100% of my home’s value?
Rarely. A wholesale conventional lane reaches 89.99% with no mortgage insurance, but it needs a 680 score, a 50% ratio, a thirty-year fixed loan, and a primary residence. Limited cash-out reaches 95% to 97% but allows only incidental cash back. VA cash-out has the highest ceiling, but only for eligible veterans, and many lenders set a lower limit.
Is mortgage insurance required above 80% LTV?
On a conventional loan, yes, unless you use the wholesale lane that skips it. You can request cancellation at 80% of the original value if you meet the conditions, and the servicer must end it automatically at 78%. VA loans use a funding fee instead, and FHA loans carry upfront and annual premiums. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Does this work on a second home or investment property?
The standard cash-out cap drops to 75% on second homes and investment property. Occupancy decides the leverage, so a one-unit primary residence typically gets the highest cap within a given program. Be clear about how you use the home before you compare lanes.
How long must I own the home before a cash-out?
At least one borrower must have been on title for 6 months. The first mortgage being paid off must also be at least 12 months old.
Does my state change the limit?
Sometimes. In Texas, a cash-out on the homestead is capped by the state constitution at the agency figure, and the wholesale 89.99% lane is not written there. Lendmire’s consumer mortgage lending covers 16 states, so ask a loan officer which lanes apply where you live.
To see how a cash-out refinance could work on the home you live in, request a scenario review with Lendmire.
For current guidelines and terms, see Lendmire’s refinance programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving homeowners and home buyers in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. U.S. Department of Veterans Affairs: Cash-Out Refinance Loan
2. Fannie Mae Selling Guide B2-1.3-02: Limited Cash-Out Refinance Transactions
3. HUD: Single-Family Streamline Refinance
4. CFPB
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 the Appraisal Works on a Cash-Out Refinance · Should You Use a Bank or a Broker for a Cash-Out Refinance? · Can You Cash-Out Refinance a Condo?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.