Here is where the ceiling sits, how long you have to wait, and the exception that can remove the wait for cash buyers.
Three tests, all at once
A cash-out refinance on a rental has to clear the leverage cap, the credit and pricing test, and the coverage test simultaneously. Clearing two and missing one means a smaller loan or a decline, and a bigger appraisal does not always fix it.
| Test | Where it usually sits | Detail |
|---|---|---|
| Leverage | Around 75% LTV | Cash-out caps below what the same lender allows on a purchase. Fannie Mae caps a cash-out on a one-unit investment property at 75% and on two to four units at 70%. Our lending partners' DSCR program goes up to 80% of value; the lender sets the cash-out limit for your file. |
| Coverage | Rent covers the payment | On a DSCR loan, rent must cover the new, larger payment by the lender's required ratio. Pulling more cash raises the payment, which lowers your ratio: the two work against each other. |
| Credit | Drives pricing | A higher score at lower leverage prices better than a lower score at the maximum on the identical property. Our lending partners' DSCR program has no minimum credit score, but the score still affects the terms. |
Seasoning: when you can ask
Seasoning is how long you must own the property, or how old the existing loan must be, before a lender will refinance with cash out based on current value rather than what you paid.
- Conventional (Fannie Mae): the existing first mortgage generally must be at least twelve months old, measured note date to note date, and at least one borrower must have been on title for six months, unless an exception such as delayed financing applies.
- DSCR and other non-QM programs: each lender sets its own clock, and it moves more often than agency rules. Ask the lender for its rule for your exact scenario rather than relying on a number you read online.
- Important distinction: seasoning decides when you may apply. It does not decide how much of the improved value the lender will count: that is a separate underwriting judgment about your appraisal and your paperwork.
Have equity sitting in a rental?
Send the address, what you owe, the rent and roughly what it is worth. Our lending partner's team reviews what a cash-out could look like. The lender makes every credit decision.
Delayed financing: the cash buyer's exception
If you bought for cash with no mortgage on the purchase, Fannie Mae's delayed financing exception lets you pull that capital back out without waiting for the usual six months on title. It is the most useful exception in this area and the most commonly misdescribed.
If you borrowed the purchase money from somewhere else, such as a line of credit, the proceeds have to repay that first. Talk to a lender before you buy in cash rather than after: the paperwork is easier to get right at the purchase closing than to reconstruct later. DSCR lenders that offer a similar exception set their own rules.
The number that catches people out
If a lender will not yet count the improved value, for example because you have owned the property only briefly, it may size the loan on your cost basis: the original purchase price plus documented improvement costs.
That is why receipts matter as much as the work. An investor who spent $60,000 on a rehab and kept invoices for $32,000 of it is refinancing against a materially smaller number than the one in their head. Keep contractor invoices, materials receipts and permits from day one, filed against the property rather than in a shoebox.
Rate-and-term or cash-out
Rate-and-term
No meaningful equity comes out. You are lowering the payment, moving off an adjustable or short-term loan, or changing the term. Leverage limits are higher: up to 80% of value on our lending partners' DSCR program.
Cash-out
You take money off the table: for the next down payment, a renovation, or to clear higher-rate debt. Lower leverage, a seasoning clock, and generally worse pricing than rate-and-term on the same property.
Be honest with yourself about which one you are doing before you apply. Structuring a cash-out as though it were a rate-and-term wastes everyone's time and surfaces at underwriting anyway.
What will not qualify
- A home you live in, or a second home. This page is about investment property only, and our lending partners finance non-owner-occupied property only.
- FHA financing. FHA loans require the borrower to occupy the home as a principal residence, so they cannot be used to cash out a rental.
- Unusual property types. Many DSCR programs exclude manufactured homes, log homes and other hard-to-value property. Ask before you apply.
- A property that will not cover the larger payment. The coverage test applies to the new loan, not the old one.
Single-family homes, condos and two to four unit properties are the widely accepted collateral. A property already financed with a DSCR loan can be refinanced again, assessed fresh against current rent and current value. Our lending partners' DSCR program covers loans from $75,000 to $2 million.
Get your deal reviewed
Answer these and your deal goes to our lending partner's team, who will contact you about whether it is fundable and on what terms. By sending it you agree to your details being shared with them. Investment property only: our lending partners do not finance a home you will live in.
Got it.
Thank you. Your details are on their way to our lending partner's team, who will contact you shortly.
Cash-out refinance questions
How much cash can I pull out of a rental property?
Most programs cap a cash-out refinance on an investment property at around 75% of appraised value. Fannie Mae allows 75% on a one-unit investment property and 70% on two to four units. Subtract your existing balance and closing costs from that figure to get the cash you would actually receive.
How long do I have to own a rental before a cash-out refinance?
For a conventional Fannie Mae loan, the existing first mortgage generally must be at least twelve months old and you must have been on title for six months. DSCR lenders set their own seasoning rules, so ask for the rule for your scenario. Delayed financing can waive the clock for cash purchases.
What is delayed financing on an investment property?
An exception for investors who bought with cash and no mortgage. It lets you refinance within six months of the purchase, capped at your documented investment plus closing costs and at the maximum LTV against the appraisal.
Does pulling cash out hurt my DSCR?
Yes, directly. A larger loan means a larger payment, and the coverage ratio is measured against the new payment. Taking the maximum available cash can push a comfortable property below the lender's required ratio.
What if my renovation receipts are missing?
If the lender sizes the loan on cost basis, purchase price plus documented improvements, undocumented work does not count. Keep invoices, receipts and permits filed against the property from the start.
Can I do a cash-out refinance on a house I live in through these programs?
No. These are business-purpose loans on non-owner-occupied investment property. A primary residence or second home needs a consumer mortgage, and FHA loans cannot be used to cash out a rental.
Sources
- Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions, 12-month and six-month seasoning and the delayed financing exception (accessed Oct 2026)
- Fannie Mae, Eligibility Matrix, 75% (one unit) and 70% (two to four units) maximum LTV on investment property cash-out (accessed Oct 2026)
- HUD Single Family Housing Policy Handbook 4000.1, FHA occupancy requirements (accessed Oct 2026)
Dominion Hard Money does not lend its own funds; it arranges financing through third-party lending partners. All financing is arranged for business purposes only and secured by non-owner-occupied investment property. Not a commitment to lend. All loans subject to underwriting, property review, and approval by the lender. Terms vary by property, borrower experience, and exit strategy.