BRRRR Calculator

Fannie Mae Cash-Out Rules for Rental Refinances (as of October 2026)

The refinance step is where most BRRRR plans meet the rulebook. For conventional loans sold to Fannie Mae:

Two consequences for BRRRR. If you bought with a hard-money loan, that loan generally has to be a year old before a Fannie Mae cash-out refinance can pay it off. And if you bought with cash and use delayed financing, the cap is what you paid, not the after-repair value, so the higher value only helps once you are past six months on title.

How the Calculator Works Through the Deal

1. Cash in = price + closing costs + rehab = $180,000 + $3,000 + $40,000 = $223,000.
2. Refinance loan = ARV × LTV = $280,000 × 75% = $210,000.
3. Cash back = loan × (1 − refinance costs) = $210,000 × 0.975 = $204,750.
4. Cash left in = $223,000 − $204,750 = $18,250.
5. Payment on $210,000 at 7.75% for 30 years = $1,504.47.
6. Operating costs = $350 taxes and insurance + 23% of $2,500 rent ($575) = $925.
7. Cash flow = $2,500 − $1,504.47 − $925 = $70.53 a month; × 12 ÷ $18,250 = 4.6% cash-on-cash.

Deal Sensitivity: Seven Variations

The trade-off runs in both directions: every extra dollar pulled out at refinance raises the payment. At 80% only $4,600 stays in the deal, but cash flow turns negative. A low appraisal leaves $32,875 tied up; its cash flow looks better only because the loan is smaller. The rate and the expense budget move cash flow the most: one percentage point of rate is worth $142.41 a month here, and budgeting 30% of rent for expenses instead of 23% turns the deal negative.

Common BRRRR Mistakes

• Counting on 80% or more. Fannie Mae caps a single-unit rental cash-out at 75%; higher leverage means a portfolio or DSCR lender at a higher rate.
• Ignoring the seasoning clock. Six months on title and a 12-month-old first lien mean months of hard-money interest that belong in the cash-in number.
• Budgeting zero for vacancy and repairs. A percentage of rent (the default is 23%) for vacancy, management and maintenance is the difference between a paper profit and a real one.
• Judging the deal by cash-on-cash alone. With very little cash left in, the percentage looks huge even when cash flow is a few dollars a month; look at the dollars and the reserve you need for a bad month.
• Repeating faster than reserves allow. Fannie Mae caps a borrower at 10 financed properties when the new loan is for a second home or rental (DU loans) and requires extra reserves as that count grows, so the cash left in every deal adds up.

What This Calculator Doesn’t Capture

It does not include the interest and holding costs during the rehab, appreciation, rent growth, principal paydown, depreciation or income tax. Investment-property loans also carry loan-level price adjustments that raise the rate; enter the rate you are actually quoted. Before committing, confirm the refinance terms in writing with the lender and have a tax professional review how depreciation and any later sale will be taxed.

Frequently Asked Questions

How to Use This Calculator

1. Enter purchase, closing and rehab costs — everything you put in before the refinance, from the settlement statement and contractor bids.
2. Enter the after-repair value and refinance terms — the appraised value you expect, the loan-to-value cap, refinance closing costs and the quoted rate.
3. Enter rent and operating costs — market rent, monthly taxes and insurance, and a percentage of rent for vacancy, management and maintenance.
4. Read the deal — cash left in, the new payment, monthly cash flow, cash-on-cash return and equity after the refinance.