Fannie Mae Seasoning Requirements for Rate and Term Refinance

Under Fannie Mae’s seasoning requirements for a rate and term refinance — officially a limited cash-out refinance — you need to satisfy one of two timing rules before the new loan can close: six consecutive monthly payments on your existing mortgage, or 210 days measured from the original note date. Both clocks start on the note date of the loan you’re replacing, and specific events like an assumption or a permanent modification can restart them.

The Two Clocks That Start on Your Note Date

Seasoning is met when either of the following is true:

You’ve made six full, consecutive monthly payments on the existing loan, each received by the servicer on or before its due date.
At least 210 days have passed between the note date of the existing loan and the note date of the new refinance loan.

Both thresholds run from the note date of the mortgage being replaced, not from the first payment date and not from when you begin shopping.¹

Here’s how the math typically works. Suppose your existing loan closed on January 15 with a first payment due March 1. Payments one through six would fall March through August. The new refinance couldn’t close until that August payment posted on time and until at least 210 days had run from January 15, which lands in mid-August. The two clocks usually finish close together, but in months with fewer days or when the original closing sat late in a month, one can finish before the other. Both must be satisfied.

When the Clock Restarts

Several situations reset or replace the standard timeline.

Assumed Mortgages

When you formally assume someone else’s mortgage, the seasoning clock does not reach back to when that loan was originally created. It starts on the effective date of the assumption agreement, and you need six consecutive on-time payments from that point before a limited cash-out refinance is eligible. Fannie Mae is looking at your payment record on the debt, not the prior borrower’s.

Loan Modifications

A permanent loan modification — the kind that comes out of a loss mitigation workout — complicates the picture. Fannie Mae generally does not purchase loans with material modifications to the original amount, interest rate, maturity date, or product structure.² Refinancing replaces the modified loan with a new one, so eligibility hinges on your post-modification track record. The standard six-payment, 210-day framework still applies, and you cannot have any serious delinquencies in the 12 months before the credit report date.³ Expect lenders to look closely at how you’ve paid since the modification took effect.

Buying Out a Co-Owner

Using a refinance to buy out a co-owner’s interest, which often follows a divorce or partnership dissolution, can qualify as a limited cash-out refinance only if the property was jointly owned for at least 12 months before the new loan’s disbursement date. Recently inherited property is an exception to that 12-month rule.¹

The rules on where the money moves are strict. The borrower who ends up with sole ownership cannot receive any of the refinance proceeds; the funds go to the departing co-owner. Both parties must sign a written agreement laying out the transfer and the distribution of proceeds. The person keeping the home has to independently qualify under Fannie Mae’s standard underwriting rules.

The High LTV Program Has Its Own Timeline

Fannie Mae’s high LTV refinance program overrides the standard rule with a longer wait. The existing loan’s note date must be at least 15 months before the note date of the new refinance loan.⁴

That program serves borrowers who owe close to or more than what the home is worth but have paid on time. The tradeoff for allowing very high LTVs is a longer seasoning period and tighter guardrails:

The existing loan must be a conventional first-lien mortgage currently owned or securitized by Fannie Mae.
The existing loan’s note date must be on or after October 1, 2017.
At least 15 months must pass between the existing note date and the new note date.

If your loan is not already in a Fannie Mae pool, you do not qualify for this program regardless of your payment record.⁴

Payment History Is a Separate Gate

Seasoning counts the months since your loan closed. Payment history looks at how you performed during those months, and the window stretches beyond the six-payment seasoning period.

Your existing mortgage must be current when you apply, meaning no more than 45 days can have passed since the last paid installment. Beyond being current, Fannie Mae defines excessive prior mortgage delinquency as any 60-day, 90-day, 120-day, or 150-day late payment reported within the 12 months before the credit report date.³ A single 60-day late in the past year can disqualify you even if every other payment landed on time.

This is where a lot of refinance applications quietly fail. Borrowers focus on whether they’ve waited long enough without checking whether the payment record is clean enough. Both gates have to open.

What Can Push You Out of “Limited Cash-Out” Territory

Seasoning only matters if the transaction still qualifies as a limited cash-out refinance. A few things can flip it into a full cash-out, which carries stricter LTV limits and longer seasoning of its own.

The cash you can receive at closing is capped at the greater of 1% of the new loan’s unpaid principal balance or $2,000.¹ Refunds of prepaid items like escrow balances don’t count against that limit. Exceed the cap and the whole loan becomes a cash-out.

Subordinate liens are the other common trigger. If a second lien or HELOC was used to buy the home, a limited cash-out refinance can pay it off as long as the lender documents that the full amount went toward the purchase. Payoff of Property Assessed Clean Energy (PACE) loans and other debt used for energy-related improvements is also allowed.¹ If the second lien was not purchase-money — a HELOC you drew on for renovations, say — paying it off moves the transaction into cash-out territory.

Leaving the second lien in place is the other route, but it usually requires a recorded resubordination agreement so the new first mortgage keeps priority. In states where the subordinate lien automatically retains its original position after a refinance, a separate resubordination document may not be needed, though your lender still has to verify that.⁵ The second lien balance still counts toward your combined LTV.

One more trap: a short-term refinance that combined a first mortgage and a non-purchase-money second into a new first is automatically classified as cash-out, and any refinance of that loan within the next six months is also treated as cash-out rather than limited cash-out.¹

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Fannie Mae. Limited Cash-Out Refinance Transactions
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Fannie Mae. Loan Eligibility
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Fannie Mae. Previous Mortgage Payment History
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Fannie Mae. High LTV Refinance Loan and Borrower Eligibility
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Fannie Mae. Subordinate Financing