Cash-out Refinance Mortgages
Use cash out for a variety of purposes
Whether your borrowers are looking to receive cash out from the increased value of their home to use for debt consolidation, or for any other purpose, Freddie Mac's cash-out refinance mortgage options could be the solution.

Our cash-out refinance mortgage offers flexibility and variety so you can meet a diverse range of borrower needs: obtaining cash for home improvements, reducing a rate and monthly payment, paying off a purchase money junior lien used for any purpose, or paying off a leasehold interest. Plus, all related closing costs, financing costs and prepaid items can be rolled into the new loan amount, further maximizing your borrower's cash flow potential.

In addition, our special purpose cash-out refinance mortgage allows borrowers in special circumstances to use the proceeds of the refinance transaction to buy out the equity of a co-owner. With the special purpose cash-out refinance mortgage in your product line, you can now offer your borrowers another option to meet their specific needs.

Product Features
Feature Requirements
Property Type 1- to 4-unit primary residences, including condos, PUDs and manufactured homes.
Second homes
1- to 4-unit investment properties

Eligible Mortgage Products 15-, 20-, and 30-year fixed-rate mortgages
5- and 7-year balloon/reset mortgages
Most standard ARMs
No seasoning requirement for eligible mortgages and inherited properties.
Super conforming mortgages. See Guide Chapter L33 for requirements.
Freddie Mac-owned Streamlined Refinance Mortgages:
May not be balloon/reset mortgages
May be a 5/1, 7/1,or 10/1 ARM
May not be an ARM if the mortgage being refinanced is a fixed-rate mortgage

Maximum LTV Ratios for New Mortgage Maximum LTV ratios must comply with Single-Family Seller/Servicer Guide, Section 23.4.1 for Loan Prospector® and manually underwritten mortgages
See Guide Chapter L.33.3 for TV/TLTV/HTLTV ratio requirements for super conforming mortgages

Eligibility/Underwriting Loan Prospector®
Non-Loan Prospector
New loan application required. No restrictions on change in borrowers.
Minimum Indicator Score of 620 unless otherwise specified in the Guide (Loan Prospector A-minus mortgages are exempt.)
All mortgages must meet the risk class and/or minimum Indicator Score requirements in Guide Exhibit 25A, where applicable.
The borrower must have been on the title to the subject property for at least six months prior to the note date of the cash-out refinance mortgage.
When a Seller originates a cash-out refinance mortgage, and that mortgage is refinanced as a no cash-out refinance mortgage, the refinance mortgage is ineligible for sale to Freddie Mac.
No asset documentation required. Seller must verify reserves if they are entered in Loan Prospector.
The Seller must make the determination regarding borrower creditworthiness in accordance with the requirements of the Single-Family Seller/Servicer Guide (Guide) Section 37.4(b).
New appraisal and inspection report required.
Special requirements apply for special purpose cash-out refinance mortgages. See Guide Section 24.7.

Down Payment or Closing Costs All closing costs, financing costs and prepaids can be rolled into the new loan amount.

Execution Options Servicing-released Cash*
Servicing-retained Cash
WAC ARM Cash
Fixed-rate Guarantor
WAC ARM Guarantor
MultiLender Swap
* See our selling system availability matrix [PDF] for a list of specific mortgages eligible for sale best efforts or mandatory, servicing released.

Delivery Fees A cash-out refinance postsettlement delivery fee applies. Freddie Mac's cash-out refinance delivery fee is not billed for special purpose cash-out refinance mortgages delivered in accordance with the requirements of Guide Section 17.18.
See Guide Exhibit 19 for details on these fees and all other applicable fees or visit Exhibit 19 [PDF].

Special Delivery Requirements You must deliver all mortgage data required by Form 11 or Form 13SF, as applicable.

Single-Family Seller/Servicer Guide Refer to Guide Section 24.6 and 24.7.

Download a Cash-out Refinance Mortgage fact sheet [PDF] for more details.

Lender Benefits
Cash-out refinance mortgages help you:

Meet the needs of more refinance borrowers looking to leverage their home equity for a variety of purposes.
Improve efficiencies using Loan Prospector technology.
Retain more of your customer base in refinance markets.
Meet the needs of borrowers with special circumstances using the special purpose cash-out refinance option.
Benefits for Your Borrowers
Cash-out refinance mortgages help your borrowers:

Receive cash out to consolidate debt or for any other purpose.
Pay off junior liens, including HELOCs. Pay off a purchase money junior lien or a leasehold interest, pay for home improvements or buy out the equity of an ex-spouse, joint heir or joint devisee.
Eliminate upfront costs by rolling all closing costs, financing costs and prepaid items into the new loan amount.