To qualify for a cash-out refinance you need enough equity, a mortgage that has been in place long enough, and the credit and income to carry the new, larger payment. The details depend on the loan program.
Requirements by program
| Requirement | Conventional | FHA | VA |
|---|---|---|---|
| Max LTV (primary, 1 unit) | 80% | 80% | 100% incl. funding fee |
| Property types | Primary, second home, investment | Primary residence only | Primary residence only |
| Waiting period | Existing first mortgage 12+ months old; 6 months on title | Owned and lived in it 12 months | VA-to-VA: 210 days after first payment due and 6 consecutive payments |
| Payment history | Per underwriting | All payments on time for the last 12 months | Per underwriting |
| Mortgage insurance | None at 80% or less | 1.75% upfront + annual MIP | Funding fee (2.15% first use, 3.3% after) unless exempt |
| Loan size | Up to the county conforming limit | Up to the county FHA limit | Lender and VA guidelines |
Sources: Fannie Mae Selling Guide B2-1.3-03 and Eligibility Matrix; Freddie Mac Guide 4203.1 and 4301.5; HUD Handbook 4000.1 section II.A.8.d.v; 38 CFR 36.4306 and VA Circular 26-20-25.
1. Equity (loan-to-value)
Your new loan can't exceed the program's maximum share of the appraised value:
- Conventional: 80% on a one-unit primary home, 75% on a two- to four-unit primary home, 75% on a second home, and 75% (one unit) or 70% (two to four units) on an investment property. These limits also apply to the combined total of any loans that stay in place.
- FHA: 80% of the appraised value, for both the new loan and any loans that remain.
- VA: up to 100% of the home's reasonable value, and the financed funding fee has to fit under that cap.
- DSCR: set by each lender, commonly up to 70%–75% on a rental.
Run your numbers in the cash-out calculator.
2. Credit score
There's no single cash-out credit-score minimum in Fannie Mae's automated underwriting — lenders set their own floors, and the score affects your price. For manually underwritten loans, Fannie Mae's matrix sets minimums for a one-unit primary home that range from 640 to 700, depending on your loan-to-value, debt-to-income ratio and cash reserves. FHA's credit rules are generally more flexible than conventional rules, though lenders still set minimum scores.
3. Waiting periods (seasoning)
- Conventional: the first mortgage you're paying off must be at least 12 months old, measured from its note date to the new note date. At least one borrower must have been on title for 6 months before the new loan funds.
- Exceptions to the 6-month title rule: an inherited property, a property awarded through divorce, separation or dissolution of a domestic partnership, and delayed financing after an all-cash purchase.
- FHA: at least one borrower must have owned and lived in the home as their primary residence for 12 months before the FHA case number is assigned. The current mortgage needs at least 6 months of payments.
- VA: if you're refinancing an existing VA loan, the new loan can't close until 210 days after the first payment due date and after 6 consecutive monthly payments.
4. Occupancy
FHA and VA cash-outs are only for a home you live in as your primary residence. Conventional cash-outs are available on primary homes, second homes and investment properties. For rentals that you'd rather qualify on rent instead of your income, see DSCR cash-out refinance.
5. Income and debt-to-income
You qualify for the full new payment. Conventional loans are approved through Fannie Mae's or Freddie Mac's automated systems, and manually underwritten loans have tighter limits on debt-to-income ratio. On an FHA cash-out, income from a non-occupant co-borrower can't be used to qualify. If you're self-employed, see our self-employed options in Colorado and Florida, including bank-statement loans.
6. Payment history
FHA requires every mortgage payment in the previous 12 months to have been made within the month it was due. Late payments also affect conventional and VA approvals and pricing.
7. The property
- An appraisal is usually required to set the value.
- The home can't be listed for sale when the loan funds.
- Loan size has to fit your county's limit — see the Colorado and Florida limit tables. Larger loans use a jumbo cash-out.
8. VA's extra protections
A VA cash-out has to give you at least one "net tangible benefit" — for example a lower rate, a lower payment, a shorter term, moving from an adjustable to a fixed rate, or ending up at 90% or less of the home's value. Your lender has to give you a loan comparison within three business days of applying and again at closing. More in our VA cash-out guide.
Documents to have ready
- Your current mortgage statement and payoff information for every loan on the home
- Recent pay stubs and W-2s (or tax returns if self-employed)
- Two months of bank statements
- Homeowners insurance declarations page
- For divorce buyouts: the divorce decree or settlement agreement
Frequently asked questions
What credit score do I need for a cash-out refinance?+
Fannie Mae's automated underwriting doesn't set a single cash-out minimum, so lenders set their own. For manually underwritten loans, Fannie Mae's matrix requires 640 to 700 on a one-unit primary home, depending on loan-to-value, debt-to-income and reserves.
How long do I have to own my home before a cash-out refinance?+
Conventional loans need the existing mortgage to be at least 12 months old and a borrower on title for 6 months. FHA needs 12 months of ownership and occupancy as your primary residence.
Can I do a cash-out refinance on a rental property?+
Yes, with a conventional loan (up to 75% for one unit, 70% for two to four units) or a DSCR loan that qualifies the property on its rent. FHA and VA cash-outs are for primary residences only.
Do I need an appraisal for a cash-out refinance?+
Usually yes, because the appraised value sets how much you can borrow. Fannie Mae and Freddie Mac sometimes offer to waive the appraisal through their automated systems.
Can I do a cash-out refinance if my home is listed for sale?+
Not while it's listed. Fannie Mae requires a previously listed home to be taken off the market on or before the date the loan funds.