Condo Refinance in Chicago: LTV Limits and Building Reviews

Last reviewed: November 7, 2026 · Chicago Condo Loans Editorial Team · How we research

Quick answer Refinancing a condo works much like refinancing a house, with one extra step: the lender usually reviews the building again, under today’s rules, even if it passed when you bought. Under Fannie Mae’s rules you can do a limited cash-out (rate-and-term) refinance up to 97% loan-to-value on a home you live in, but only if Fannie Mae owns your current loan; otherwise the matrix limits apply. Cash-out refinances top out at 80% for a primary residence and 75% for second homes and rentals. Some refinances skip the building review, including a Fannie Mae-owned loan refinanced as a limited cash-out at 80% loan-to-value or less. FHA and VA streamline refinances are the easiest routes when you already have one of those loans.

This is part of our complete guide to condo loans in Chicago.

Will my building be reviewed again when I refinance?

Usually, yes. A conventional lender selling your new loan to Fannie Mae has to confirm the building is eligible on the day of the new loan. A building that passed in 2020 can fail today if it now has unfunded critical repairs, a lawsuit over structural issues, too many delinquent owners or thin reserves. Lender reviews also got stricter this year: Limited Review was retired for applications on or after August 3, 2026, so buildings that don’t qualify for a waiver now get a full review. See Limited Review is gone and our guide to warrantable vs. non-warrantable condos.

Fannie Mae waives the project review in a few cases (Selling Guide B4-2.1-02):

Fannie Mae-owned loans refinanced as a limited cash-out refinance with a maximum loan-to-value of 80%. This is the most useful waiver for refinancing owners in larger Chicago buildings.
Units in two- to four-unit condo projects, common in converted two-flats and three-flats.
Units in five- to ten-unit projects that aren’t part of a larger master association.
Detached condos.

A waiver skips the review, not the rules on the unit itself: the property still has to be eligible and Fannie Mae’s insurance requirements still apply, including the master policy deductible caps described in our post on 2026 condo insurance requirements. Fannie Mae and Freddie Mac each have a free online loan lookup tool, so you can check which one, if either, owns your current loan.

How much can I borrow on a conventional condo refinance?

Occupancy	Limited cash-out (rate-and-term)	Cash-out
Principal residence	97% (only when Fannie Mae owns the existing loan; otherwise lower)	80%
Second home	90%	75%
Investment property	75%	75%

Maximum loan-to-value for fixed-rate, one-unit loans run through Desktop Underwriter. Source: Fannie Mae Eligibility Matrix, August 5, 2026, which notes that lower limits may apply depending on the type of condo project review. Lenders can set stricter limits.

Example: your condo appraises at $400,000 and you owe $250,000. A cash-out refinance on the home you live in can go up to $320,000 (80%), so you could take out up to about $70,000 before closing costs. On a rental unit with the same numbers, the 75% cap allows $300,000, or about $50,000. Because every figure rests on the appraised value, see our guide to condo appraisals for how units are valued and how to challenge a low appraisal.

What are the rules for limited cash-out and cash-out refinances?

Rule	Limited cash-out (rate-and-term)	Cash-out
Cash you can receive	The greater of 1% of the new loan amount or $2,000	Any amount within the loan-to-value limit
What the loan can pay for	Paying off the first mortgage, closing costs, points and prepaid items, a second mortgage used to buy the condo, or buying out a co-owner under an agreement	Anything
Waiting period	No general seasoning rule; buying out a co-owner requires 12 months of joint ownership	At least one borrower on title for 6 months, and an existing first mortgage being paid off must be at least 12 months old (note date to note date)
Recently listed for sale	Ask your lender	The listing must be taken down by the time the new loan funds

Sources: Fannie Mae Selling Guide B2-1.3-02 (October 8, 2025) and B2-1.3-03 (December 10, 2025).

If you bought with cash, Fannie Mae’s delayed financing exception lets you take cash out within the first 6 months, as long as the purchase was arm’s length, no mortgage financing was used and the funds are documented. The new loan can’t exceed what you put in plus closing costs. This is the usual way to finish a “buy with cash, refinance later” plan for a building that couldn’t be financed at the time, as long as the building qualifies by then.

Can I do an FHA streamline refinance on a condo?

Yes, if your current loan is FHA. HUD (knowledge article KA-02382) says that FHA-insured units remain eligible for FHA-to-FHA streamline refinances even when the building’s FHA approval has been withdrawn or the building no longer meets the criteria. HUD’s streamline rules (knowledge article KA-03783, citing Handbook 4000.1 II.A.8.d) require that the loan you’re refinancing is already FHA-insured and current, that at least six payments have been made on it, and that at least 210 days have passed since its disbursement date; no appraisal is required. The new loan has to give you a net tangible benefit, such as a lower payment. Cash back on a streamline is very limited; ask your lender for the current limit.

Other FHA refinances follow FHA’s general condo rule: the unit must be in an FHA-approved project or qualify for single-unit approval (24 CFR 203.43b). FHA cash-out refinances are capped at 80% of the property’s adjusted value (Mortgagee Letter 2019-11, August 1, 2019; for case numbers assigned on or after September 1, 2019). See our FHA condo approval guide to check a building.

Many FHA borrowers later refinance into a conventional loan to get rid of the annual mortgage insurance premium. That requires a conventional building review and enough equity; our guide to condo down payments and PMI explains the costs on each side.

How do VA refinances work on a condo?

Detail	VA IRRRL (streamline)	VA cash-out refinance
Existing loan	Must be a VA loan	Can be VA or another loan type
Occupancy	You live in the home now or used to	You’ll live in the home
Waiting period	Six consecutive monthly payments, and 210 days after the first payment due date of the loan being refinanced	If the loan being refinanced is a VA loan: the later of six monthly payments or 210 days after the first payment due date (38 CFR 36.4306(c)(2)); otherwise ask your lender
Benefit test	Rate at least 0.5 percentage points lower (fixed to fixed) or 2 points lower (fixed to adjustable); fees and costs recouped within 36 months	The statute’s rate and 36-month recoupment tests don’t apply (38 U.S.C. 3709(d)); the loan can’t exceed 100% of the home’s reasonable value (38 CFR 36.4306(a)(1))
Appraisal	Ask your lender	Required
Funding fee	0.5%	2.15% first use, 3.3% after (exemptions apply)

Sources: 38 U.S.C. 3709; 38 CFR 36.4306; VA.gov IRRRL and cash-out refinance pages (updated January 7, 2026); VA.gov funding fee page (updated October 5, 2026; rates in effect since April 7, 2023).

VA guarantees loans on condo units only in projects VA has approved, and a cash-out refinance is a new VA-guaranteed loan, so check the building on VA’s Condo Report before you apply. Ask your lender how it handles the building for an IRRRL. See our VA condo loan guide.

What if my building no longer qualifies?

You have a few options:

Use a streamline if you already have an FHA or VA loan.
Check the Fannie Mae waiver if Fannie Mae owns your loan and a limited cash-out refinance at 80% loan-to-value or less meets your goal.
Look at portfolio lenders, often banks and credit unions that keep loans on their books and set their own building standards, usually at a higher rate or with more equity required.
Wait until the problem is fixed, such as a lawsuit settled, critical repairs completed and documented, or a special assessment funded.

How to prepare for a condo refinance

Find out who owns your loan (Fannie Mae, Freddie Mac, FHA, VA or a portfolio lender). It decides which shortcuts are open to you.
Ask the association early how long the lender’s condo questionnaire takes and what it costs.
Ask about anything that could fail a review: pending special assessments, lawsuits, delinquencies, reserve levels and recent inspection reports.
Get the master insurance certificate and check your HO-6 policy meets current minimums.
Compare at more than one loan-to-value, since pricing often changes at 75% and 80%.

Frequently asked questions

Does my condo building need to be approved again when I refinance?

Usually. Conventional lenders review the building under current rules unless a waiver applies, such as a Fannie Mae-owned loan refinanced as a limited cash-out at 80% loan-to-value or less, or a unit in a small project. FHA-to-FHA streamline refinances are allowed even if the building’s FHA approval has lapsed.

What is the maximum cash-out refinance on a condo?

Under Fannie Mae’s rules, 80% of the home’s value for a home you live in and 75% for a second home or investment unit. FHA cash-out refinances are also capped at 80%.

How soon can I do a cash-out refinance on a condo?

Under Fannie Mae’s rules, at least one borrower must have been on title for 6 months, and a first mortgage being paid off must be at least 12 months old. If you bought with cash, the delayed financing exception lets you refinance sooner.

How much cash can I get from a rate-and-term refinance?

Under Fannie Mae’s rules, no more than the greater of 1% of the new loan amount or $2,000.

Can I refinance a condo in a non-warrantable building?

Often, through an FHA or VA streamline if you already have one of those loans, through Fannie Mae’s refinance waiver if it applies, or through a portfolio lender that sets its own building rules.

Sources

Educational content only, not lending, legal or financial advice. See our Disclaimer.