Both agencies allow cash-out refinance with seasoned ownership (typically 12 months minimum) and post-refinance leverage that satisfies tier tests. Cash-out reflects equity built through value appreciation, NOI growth, or paydown, and is rate-tier eligible if the resulting loan still meets the desired tier's parameters.
What seasoning is required?
Most agency cash-out refinances require at least 12 months of ownership at the property, with full operating history under current sponsor management. Some lenders will entertain shorter seasoning where a clear value add (renovation completion, lease-up) supports the higher value mark.
How is the cash-out amount sized?
Sized to the lower of: (a) maximum LTV per the desired tier, (b) maximum DSCR-supported loan amount, and (c) any program-specific cash-out caps. Most market-rate cash-out refinances stop at 75 percent LTV and 1.30x DSCR using the new loan's debt service.
Sources
- Delegated Underwriting and Servicing (DUS) program disclosures · Fannie Mae · current
- Optigo lending program disclosures · Freddie Mac Multifamily · current