Mortgage Navigator • Conventional • Refinance

Limited / no-cash-out refinance

A refinance can still be limited/no-cash-out even when the borrower receives a small amount back at closing.

Build My Mortgage Game Plan Conventional Navigator

Fannie

Fannie's Limited Cash-Out Refinance can generally pay off the existing first mortgage, finance eligible closing costs/prepaids, and handle eligible purchase-money subordinate financing while allowing only limited cash back under the current rule.

Fannie cash back

Current Fannie guidance permits borrower cash back that does not exceed the greater of 1% of the new refinance loan amount or $2,000, plus certain permitted refunds or curtailments.

Freddie

Freddie calls the corresponding category a “no cash-out” refinance. Section 4301.4 controls eligible payoff items, subordinate financing, closing costs and excess proceeds.

Mortgage myth: “If the borrower gets $1 at closing, it is cash-out” is false. Small permitted excess proceeds can still fit the agency's limited/no-cash-out category.

Official guide baseline

Fannie Mae Selling Guide · Freddie Mac Seller/Servicer Guide

Refinance classification matters. A transaction that falls outside limited/no-cash-out rules may become cash-out even when the borrower receives little or no cash personally.