Eligibility Requirements

Cash-out refinance transactions must meet the following requirements:

  • The existing mortgages need to be paid off.
  • Continuity of obligation must be demonstrated.
  • Properties listed for sale in the 6 months preceding the application date for new financing are limited to 70% LTV/CLTV/HCLTV ratios (or less if mandated by specific product/occupancy/property type; i.e., 65% for manufactured homes). Note: Properties that were listed must have been taken off the market on or before the application date.
  • You must have had your current mortgage at least six months.

The following transaction types are not eligible as cash-out refinances:

  • The mortgage is subject to a temporary interest rate buydown.
  • The subject property was purchased by the borrower within the 6 months preceding the application for new financing.
  • The subject property is currently listed for sale.
  • The existing mortgage is a “restructured mortgage.”

Acceptable Uses

  • The following are acceptable uses for cash-out refinance transactions:
  • Paying off the unpaid principal balance of the existing first mortgage.
  • Financing the payment of closing costs, prepaid items, and points.
  • Paying off any outstanding subordinate mortgage liens of any age.
  • Taking equity out of the subject property that may be used for any purpose.
  • Financing a short-term refinance mortgage loan that combines a first mortgage and a nonpurchase- money subordinate mortgage nonpurchase-money subordinate mortgage into a new first mortgage or a refinance of the short term refinance loan within 6 months