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Fannie Mae & Freddie Mac – Maximum Allowable Cash Back on a Refinance
Question:
Is there any difference between Fannie Mae and Freddie Mac when it comes to the allowable cash back on a Fannie Mae limited cash-out refinance or a Freddie Mac no-cash-out refinance?
Answer:
A timely question, as the guidelines for Fannie Mae on this topic have just changed.
For Fannie Mae –
What It Was:
- Cash back for limited cash-out refinances was capped at the lesser of 2% of the new loan amount or $2,000.
What It Is Now:
- Cash back limit increased to the greater of 1% of the unpaid principal balance (UPB) of the new loan or $2,000.
- Applies to all limited cash-out refinance transactions, effective October 8, 2025.
For Freddie Mac – The greater of 1% of the new refinance mortgage or $2000.
MortageGuidelines.com Resource:
MortgageGuidelines.com offers an All-Agency Comparison Chart for “Refinance Loans – Max Cash Back to Borrower at Closing,” accessible under ‘Guideline References’ in the ‘Charts & Checklists’ section of the ‘All Agency’ section.