The Quick Read: It depends on the property. Occupancy and unit count set the loan-to-value cap, and your cash is what is left under that cap after payoffs and costs. On a one-unit home you live in, a conventional cash-out reaches 80%. Two- to four-unit homes and second homes stop at 75%. Same equity, less cash.
Those caps are program limits, subject to lender guidelines and full file review. None of this is a commitment to lend.
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: 7.18% as of November 5, 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.
The Formula Behind Every Cash-Out Number
The cash you receive is the home’s value times the program cap, minus everything that must be paid off or financed. That is the whole formula.
Written out:
Cash to you = (appraised value × maximum LTV) − your current mortgage payoff − other liens paid off − closing costs and fees you finance.
Here is the part people miss. The 80% is not 80% of your home’s value in cash. It is the ceiling on your total debt against the home. If you owe 50% of the value today, a one-unit primary home at an 80% cap leaves 30% of the value as a ceiling for new cash. Financed costs come out of that 30%.
Pay your closing costs out of pocket and they do not reduce the proceeds. Roll them into the loan and they sit inside the cap. (That is a real choice, and it is yours to make before closing.)
Lendmire’s cash-out refinance programs page lays out how these programs fit together. Here, the focus is how the property changes the cap.
Key Terms Defined
Loan-to-value (LTV): the new loan balance divided by the home’s appraised value, shown as a percentage.
Occupancy: how the property is used. A principal residence is where you live. A second home is a place you keep for your own use. A rental is leased to tenants.
Cash-out refinance: a new mortgage that pays off the old one and puts the leftover equity in your hands as cash.
Limited cash-out (rate-and-term) refinance: a new mortgage that pays off the old one and costs, with only a small, capped amount of cash back.
Lien: a legal claim on the home, such as a first mortgage, a home equity loan, or a line of credit.
Seasoning: the waiting period an existing loan or your time on title must satisfy before you can refinance.
Mortgage insurance: a policy that protects the lender when your down payment or equity is thin, usually charged as an added monthly cost.
Cash by Property Type, Side by Side
Occupancy and unit count decide the conventional cap. The table uses one made-up homeowner who owes 50% of the home’s value and shows the ceiling for new cash before costs and other payoffs. The percentages are program caps from Fannie Mae’s guideline document, consistent with the wholesale programs Lendmire places files with.
| Property type | Conventional cash-out cap | Ceiling for cash (owing 50%) |
|---|---|---|
| One-unit principal residence | 80% | 30% of value |
| Two- to four-unit principal residence | 75% | 25% of value |
| Second home | 75% | 25% of value |
Rentals follow the same logic: an investment property also caps at 75%, so occupancy decides leverage. Five points of leverage sounds small. On a home worth several hundred thousand dollars, it is the difference between a roof repair and a roof plus a kitchen.
One-Unit Home You Live In: The Highest Cap
A one-unit principal residence gets the best leverage in a conventional cash-out: 80% LTV. That ceiling has been the general limit for both Fannie Mae and Freddie Mac cash-out loans for years.
There is one wholesale exception worth knowing. Across the programs Lendmire places files with, one lane reaches 89.99% LTV with no mortgage insurance. It has tight conditions: a 680 score, a 50% total ratio ceiling, a thirty-year fixed rate, a primary residence, a conforming loan balance, and its own six months of seasoning. It is the one exception to the rule that mortgage insurance applies above 80% LTV on the agency path. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Missing any condition takes you back to the 80% cap.
Texas works differently. A cash-out on a Texas homestead, known as a Section 50(a)(6) loan, is capped at 80% of the home’s value by the state constitution. The 89.99% lane is not written there.
Two- to Four-Unit Homes and Second Homes: 75%
Move to a two- to four-unit principal residence and the cap drops to 75%. A second home also sits at 75%. The lender sees more risk in a multi-unit building and in a property you do not live in full time.
Run it on a home where you owe 60% of the value. A one-unit primary residence leaves 20% of value as the ceiling for cash. A duplex you live in leaves 15%. A second home leaves 15%. Same debt, five points less of the home’s value available as cash.
So if you own more than one property, the cap tells you which one to tap. In this example, the one-unit home you live in leaves the most room for cash from the same equity. A second home may still be the better choice if its mortgage is smaller or its payoff is cleaner. Compare the cash ceiling, not just the equity.
FHA, VA, and Jumbo: Different Caps, Different Rules
Government programs set their own caps. They also tie cash-out to the home you live in more tightly than conventional loans do.
FHA. HUD set the maximum LTV and combined LTV for cash-out refinances at 80%, applied to the appraised “Adjusted Value.” Some borrowers still expect 85%. That older figure no longer applies. FHA’s Streamline refinance is a different product and does not put cash in your pocket.
VA. VA describes its cash-out loan as a way to take cash from your equity or to refinance a non-VA loan into a VA-backed one. A private lender provides it, and a funding fee may be due. The program’s own pages do not publish a leverage ceiling, so confirm it with a lender. The VA IRRRL, the VA Streamline, is for borrowers who already hold a VA loan, and it is also a no-cash-out product.
Jumbo. Above the conforming loan limit, jumbo lanes take over with their own score, leverage, and ratio rules. The cash ceiling depends on the individual lane and the property, so a file review comes first.
What Shrinks the Cash
Five things come out of the ceiling before you see a dollar.
1. Your current mortgage payoff. This is the biggest bite.
2. Other liens. A home equity loan or a line of credit that must be paid off counts against the cap. A drawn HELOC reduces your cash even if you have been ignoring it.
3. Financed closing costs. Appraisal, title, and origination charges rolled into the new loan sit inside the cap. The Loan Estimate and Closing Disclosure show them, along with the cash to or from you, so read each line of those forms closely.
4. The appraisal. The cap applies to appraised value, not what you hoped the home was worth. A lower number shrinks everything.
5. Special property types. Fannie Mae treats manufactured homes under a separate matrix with lower caps in some cases. Condos and other unusual properties can also change the picture, so confirm early.
A home with no mortgage still counts. A free-and-clear home is treated as a cash-out, so the whole new loan counts as cash. Same cap, but no payoff line to subtract.
Reserves matter too. On Fannie Mae’s automated underwriting files with a debt-to-income ratio above 45%, minimum reserves apply to cash-outs, per the same guideline document.
Gates You Pass Before the Cap Matters
The cap tells you the most you can borrow. Eligibility tells you whether you can borrow at all. Across the conventional programs Lendmire places files with, a cash-out generally asks for these:
- The first mortgage you are paying off must be at least 12 months old, counted note date to note date.
- A borrower must have been on title for six months. Exceptions exist for delayed financing, inheritance, and legal awards.
- A decision score starting at 620 on the wholesale conventional programs, with the automated finding governing most files.
- A total ratio ceiling of 50% on automated findings.
Delayed financing deserves a note. A recent all-cash buyer can cash out inside the six-month title wait if the purchase and source of funds are documented. It is still priced and capped as a cash-out. All of this is subject to lender guidelines and full file review.
When a Limited Cash-Out Is the Smarter Pick
If you mainly want to change your loan and not pull equity, a limited cash-out refinance can reach higher leverage. On a one-unit principal residence, the program reaches 95% LTV, and 97% where the existing loan is agency-owned and the first-time-buyer program allows. Final terms depend on lender guidelines and the borrower’s complete credit picture.
The tradeoff: very little cash. The new loan pays off the existing first mortgage, closing costs, and a purchase-money second lien. Fannie Mae allows cash back of the lesser of 2% of the new loan amount or $2,000. Freddie Mac allows the greater of 1% of the new loan amount or $2,000, and calls its version a “no cash-out” refinance.
Buying out a co-owner is one common reason to choose this route. When it is done under a written agreement, both agencies treat it as a limited cash-out transaction, and it is not a renovation feature.
Higher leverage brings mortgage insurance. The borrower may ask to cancel it at 80% of the original value, with a good payment history, no subordinate liens, and no decline in value. The servicer must end it at 78%. These specifics are subject to a full review of property, leverage, and credit. Every figure here varies by lender and program, and guidelines, property type, leverage, and credit profile all apply.
Working Backward From a Cash Target
Start from the cash you want, then flip the formula.
Value you need = (payoffs + financed costs + target cash) ÷ the cap for your property type.
Suppose a household needs cash equal to 20% of the home’s value and owes 55%. A one-unit primary home at 80% leaves 25% of value as the ceiling, so the target fits with 5% of value to spare, and financed costs come out of that cushion. The same math on a second home at 75% leaves exactly 20%. That meets the target only before costs, and any financed cost breaks it.
That is the useful check. If the numbers only work at the cap, they probably do not work after costs. Build in a cushion.
Mistakes That Cost Owners Cash
- Treating 80% as the cash. It is the ceiling on all your debt.
- Forgetting the HELOC. A second lien comes out of your proceeds.
- Ignoring financed costs. They sit inside the cap and reduce what you walk away with.
- Assuming the biggest property gives the most cash. A smaller mortgage on a lower-cap property can beat it.
- Confusing limited cash-out with cash-out. Different transactions, different caps.
- Expecting a lower payment. A larger balance generally means a larger payment, and part of any drop can come from a longer term. Compare the full terms on the Loan Estimate.
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. Lendmire is a mortgage broker, so it arranges loans through wholesale lenders and does not lend directly. Call 828-256-2183 to talk through your property and your target.
Frequently Asked Questions
Can I get more cash from a second home or a rental than from my own home?
Usually not. A conventional cash-out on a one-unit principal residence reaches 80%, while second homes and investment property cap at 75%. The same equity yields less cash on the lower-cap property. A smaller mortgage balance on that property is the main way it can still win.
Does a paid-off home still count as a cash-out refinance?
Yes. A new loan on a home with no mortgage is treated as a cash-out, so the full loan amount counts as cash. The same cap applies for the property type. Closing costs, if financed, still come out of the ceiling.
Does FHA cash-out go up to 85%?
No. HUD lowered the maximum LTV and combined LTV for FHA cash-out refinances to 80%. If someone quotes you 85%, they are using an older rule. Confirm the current limit on your file with the lender.
Can I cash out right after buying a home?
Generally not right away. Conventional programs typically require the first mortgage to be at least 12 months old and a borrower to be on title for six months. Delayed financing is the exception for recent all-cash buyers with documented funds.
Why does the limited cash-out refinance reach higher leverage than a cash-out?
The lender sees less risk when you are not taking equity out. On a one-unit primary home, a limited cash-out reaches 95%, against 80% for a cash-out. The tradeoff is only a small, capped amount of cash back.
For your own numbers, 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 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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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Fannie Mae, document incorporated into the Selling Guide (LTV table)
2. HUD Handbook 4000.1 update transmittal
3. VA
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 Much Cash Comes Out of a Cash-Out Refinance When the Appraisal Comes Lower? · How Much Cash Comes Out of a Cash-Out Refinance on a Residential Property? · How Much Cash Comes Out of a Cash-Out Refinance After Adding a Co-Borrower?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.