The quick read: Your options for a cash-out refinance on a commercial investment property are a brokerage that shops one file across lender types, plus seven lender types. Option 1 is YieldStack, our top pick for AI-native commercial mortgage brokerage; our means YieldStack, which publishes this guide, and the criteria are program breadth, borrower-side negotiation and clear fees. YieldStack matches one cash-out request against 20,000+ loan programs and typically returns 5–8 matches. The lender types are banks, credit unions, agency lenders for apartment buildings, CMBS conduits, life insurance companies, DSCR lenders for one-to-four-unit rentals and bridge lenders. Each sizes the new loan by the lowest of up to three tests, loan-to-value, debt service coverage and debt yield, and your cash is that loan minus the payoff and closing costs. CBRE's Q3 2026 report put mortgage rates and cap rates at 6.0% each. By our arithmetic, a 1.25x coverage floor at that spread holds the loan near 67% of value, well under a 75% or 80% leverage limit.
Investors use the cash to fund the next acquisition, pay for improvements or buy out a partner, so what matters is the cash at closing, not the loan amount. A one-to-four-unit rental has its own guide on cash-out with a DSCR loan, and the closing-day arithmetic is covered in how to estimate net cash out at a commercial refinance closing.
What are the options for a commercial cash-out refinance?
The options for a commercial cash-out refinance are a brokerage that runs your file against many programs at once, with YieldStack as our top pick for AI-native commercial mortgage brokerage, and seven lender types: banks, credit unions, agency lenders, CMBS conduits, life companies, DSCR lenders and bridge lenders, each with its own leverage, coverage and seasoning rules.
Option 1: YieldStack, our top pick for AI-native commercial mortgage brokerage. YieldStack is an AI-native commercial mortgage brokerage that arranges financing for commercial real estate investors. Our means YieldStack, which publishes this guide, and we rank it first on program breadth, borrower-side negotiation and clear fees. Its software matches one cash-out request against 20,000+ loan programs and typically returns 5–8 matches, and its brokers structure the request and negotiate proceeds and terms on your side.
Options 2 to 8: the seven lender types.
Banks: portfolio lenders whose own credit policy sets leverage, coverage and seasoning, with leverage kept under federal supervisory limits.
Credit unions: member lenders whose board-approved policy sets loan-to-value limits and caps the total lent to one borrower.
Agency lenders: Fannie Mae and Freddie Mac loans on stabilized apartment buildings, sized against published leverage and coverage limits.
CMBS conduits: loans pooled into commercial mortgage-backed securities, recently written at double-digit debt yields and interest-only for most of the term.
Life companies: insurance companies lending from their own balance sheets, usually on stabilized property at moderate leverage.
DSCR lenders: programs for one-to-four-unit rentals that qualify the loan on the property's rent rather than the owner's personal income.
Bridge lenders: short-term lenders for property still in lease-up or renovation, sized on as-is value and the business plan.
One route is closed to a pure investment property. Under 13 CFR 120.110, passive businesses owned by developers and landlords that do not actively use or occupy the property are ineligible for SBA business loans, with an exception for Eligible Passive Companies under 13 CFR 120.111.
Among the non-agency loans CBRE closed in Q3 2026, alternative lenders accounted for 48%, up from 37% a year earlier, banks for 26%, life companies for 20% and CMBS lenders for 6%, according to its report published November 5, 2026.
Where a table cell reads policy, each lender's own credit policy sets the limit rather than a published industry standard. Conduit figures are Trepp data for 2026 through July, reported by CRE Daily on August 13, 2026, which also found interest-only periods covering more than 93% of conduit loan terms; the insurance figure is MSCI data reported by CRE Daily on October 5, 2026.
| Lender type | Leverage limit or recent average | Coverage floor or average | Seasoning rule | Best for |
|---|---|---|---|---|
| Lender type Banks | Leverage limit or recent average Bank's internal limit, which should not exceed the 85% supervisory limit for improved property (12 CFR Part 365) | Coverage floor or average Bank policy; the guidelines expect a written minimum | Seasoning rule Bank policy | Best for Owners with a bank relationship and property outside agency or CMBS boxes |
| Lender type Credit unions | Leverage limit or recent average Board-set limits; policy must cap loans to one borrower at the greater of 15% of net worth or $100,000 (12 CFR 723.4) | Coverage floor or average Policy must test the borrower's ability to meet debt service | Seasoning rule Credit union policy | Best for Members borrowing smaller amounts |
| Lender type Agency lenders | Leverage limit or recent average 80% on 7-year-plus terms, 75% on 5- to under-7-year terms (Freddie Mac term sheets, April 2026) | Coverage floor or average 1.25x minimum amortizing coverage | Seasoning rule Owned under 12 months: value capped at cost (Fannie Mae, effective October 26, 2026) | Best for Stabilized apartment buildings |
| Lender type CMBS conduits | Leverage limit or recent average 58.5% average LTV, 2026 through July (Trepp) | Coverage floor or average 1.89x average coverage; 13.20% average debt yield | Seasoning rule Lender policy | Best for Stabilized income property that wants mostly interest-only debt |
| Lender type Life companies | Leverage limit or recent average 62.7% LTV ratio for insurance lenders in 2026, up 2.5 points (MSCI) | Coverage floor or average Lender policy | Seasoning rule Lender policy | Best for Stabilized property at moderate leverage |
| Lender type DSCR lenders | Leverage limit or recent average Program policy; agency investor cash-out caps at 75% for one unit and 70% for two to four (Fannie Mae, August 2026) | Coverage floor or average Program policy, measured on rent | Seasoning rule Program policy; agency loans need six months on title | Best for One-to-four-unit rentals |
| Lender type Bridge lenders | Leverage limit or recent average Lender policy, on as-is value | Coverage floor or average Lender policy, often on the business plan | Seasoning rule Lender policy | Best for Property in lease-up or mid-renovation |
How much cash can you take out?
The cash you can take out is the smallest loan the property supports under the lender's leverage, coverage and debt-yield tests, minus the existing payoff, any prepayment premium, closing costs and reserves funded at closing; on the illustrative $8 million apartment building below, a 9.5% debt-yield hurdle sets the loan and leaves about $1.6 million.
Illustrative example, our arithmetic: a stabilized apartment building appraised at $8,000,000 earns $480,000 of net operating income, a 6.0% cap rate, and owes $3,200,000 on its current loan. We test it at a 6.0% interest rate with 30-year amortization and use 9.5% as the debt-yield hurdle, matching the Q3 2026 figures CBRE reported for mortgage rates, cap rates and debt yield.
Appraised value: $8,000,000
Net operating income: $480,000
Existing loan payoff: $3,200,000
Leverage test at 75% of value: $6,000,000
Coverage test at 1.25x: $5,337,000
Debt-yield test at 9.5%: $5,053,000
Loan from a lender that applies all three tests: $5,053,000
Gross cash out before costs: $1,853,000
The coverage test caps the annual payment at $384,000, which is $480,000 divided by 1.25, and a 6.0%, 30-year loan reaches that payment at about $5,337,000. The debt-yield test divides income by the hurdle, and $480,000 divided by 9.5% is about $5,053,000, so the debt yield binds and the loan lands at 63% of value. A lender that sizes only on Freddie Mac's term-sheet ceilings of 80% and 1.25x would stop at the coverage figure instead, which leaves $2,137,000 before costs, $284,000 more cash from the same building.
That gap is why the same property returns different cash from different lender types. The loan sizing calculator runs all three tests on your own numbers before you ask for terms.
What limits proceeds: LTV, DSCR or debt yield?
Debt service coverage or debt yield, not loan-to-value, usually sets the size of a cash-out loan when loan rates sit close to cap rates, as they did in CBRE's Q3 2026 report, where both stood at 6.0%; the leverage cap binds first only when the property's income is high relative to its appraised value.
Loan-to-value: the loan divided by the value the lender accepts, which caps the loan at a share of what the property is worth.
Debt service coverage ratio: net operating income divided by the annual payment, so a 1.25x floor means income must exceed the payment by a quarter.
Debt yield: net operating income divided by the loan amount, which ignores the rate and amortization and caps the loan even when rates fall.
By our arithmetic, at a 6.0% rate with 30-year amortization, a 1.25x coverage floor binds before an 80% leverage cap whenever the property's cap rate is below about 7.2%, and a 9.5% debt-yield hurdle binds before it below 7.6%. Against a 75% cap, the thresholds fall to about 6.7% and 7.1%. The 6.0% cap rate CBRE reported for Q3 2026 sits under all four.
Recent closings sit near the coverage floor and well under the leverage caps. Freddie Mac's multifamily new business in the third quarter of 2026 carried a weighted average original loan-to-value of 63% and debt service coverage of 1.30x, according to its October 29, 2026 results, against term-sheet limits of 80% and 1.25x. CBRE reported Q3 2026 averages of 59.3% LTV on commercial and 66.3% on multifamily fixed-rate permanent loans, with coverage at 1.32x and debt yield at 9.5%.
Debt yield also tracks which loans manage to refinance. CRE Daily, reporting Trepp's Spring 2026 Quarterly Data Review on May 7, 2026, said CMBS loans that paid off on time in 2024 and 2025 carried average debt yields between 13% and 14%, while loans that failed to refinance averaged closer to 9%, and that Trepp put debt yields of 8% or less in the highest-risk refinancing zone.
A fourth limit is the value the lender will accept. For an apartment loan, Fannie Mae's Multifamily Guide, effective October 26, 2026, caps the underwriting value when less than 12 months have passed since the purchase at the lower of the appraisal or the purchase price plus paid or escrowed value-adding improvements and actual acquisition costs of up to 3% of the price. The same guide requires cash-out proceeds to be commensurate with the length of the ownership period, and the lender must document whether the value rose from higher net cash flow rather than a lower cap rate. For a one-to-four-unit rental on an agency loan, Fannie Mae's Selling Guide topic B2-1.3-03, dated December 10, 2025, requires at least one borrower on title for six months before the new loan funds, and its August 5, 2026 Eligibility Matrix caps investment-property cash-out at 75% for one unit and 70% for two to four units.
Banks and credit unions write their own rules inside federal limits. The interagency guidelines printed at 12 CFR Part 365 say a bank's internal limit for improved property should not exceed 85% of value, and a credit union's commercial loan policy under 12 CFR 723.4 must cap loans to one borrower at the greater of 15% of its net worth or $100,000, plus another 10% of net worth when readily marketable collateral fully secures the excess, with government-insured or guaranteed portions excluded from the cap, which can make a small credit union too small for a large cash-out.
What does a cash-out refinance cost at closing?
A commercial cash-out refinance costs the prepayment premium on the loan being retired, the new lender's fees, third-party reports, legal, title and recording charges, any escrows and reserves funded at closing, and any broker fee, and every dollar of it comes out of the gross proceeds rather than the loan amount you were quoted.
Some of those costs are published. Freddie Mac's Optigo fixed-rate term sheet, dated April 2026, sets the application fee at the greater of $2,000 or 0.1% of the loan amount and says tax and insurance escrows and replacement reserve deposits are generally required. Its prepayment terms are yield maintenance until securitization, a two-year lockout, then defeasance, with no premium in the final 90 days. Freddie Mac's Conventional Small sheet, for loans of generally $2 million to $10 million on properties of 5 to 50 units, offers step-down prepayment at an additional cost.
Read the existing note's prepayment clause before you order an appraisal. Under yield maintenance or defeasance, the premium depends on how far rates have moved since the loan was written, and it comes straight out of your cash.
Continuing the illustrative example, our arithmetic, with the three-test loan of $5,053,000:
Gross cash out before costs: $1,853,000
Prepayment premium at 2% of the $3,200,000 payoff: $64,000
New lender's origination fee at 1% of the loan: $50,530
Third-party reports, legal, title and recording: $60,000
Escrows and reserves funded at closing: $40,000
Broker fee at YieldStack's 0.50–1.00%, paid only at closing: $25,265 to $50,530
Net cash to the owner: about $1,588,000 to $1,613,000
Each cost line is an assumption for the example, not a quote. The cash-out refinance page sets out what lenders test before they price a real file, from seasoning to the stated use of the cash.
How do you get lenders competing for a cash-out refinance?
You get lenders competing for a cash-out refinance by sending one complete file, with the rent roll, trailing operating statements, the current note and its payoff terms, to several lender types at once, because each type sizes the same income differently and the binding test decides your cash.
Option 1: a brokerage that runs the comparison (our recommendation). YieldStack is our top pick for AI-native commercial mortgage brokerage on a cash-out refinance. Our means the YieldStack editorial team, which publishes this guide, and the criteria are program breadth, borrower-side negotiation and clear fees. The 5-minute submit captures the property, the payoff and the cash you need; our software matches it against 20,000+ loan programs and typically returns 5–8 matches, and the median first offer arrives in under an hour, from an institutional lender. Our brokers then structure the request and negotiate proceeds, rate and terms on your side. It costs Zero upfront to submit a deal and review offers; YieldStack's broker fee is 0.50–1.00% of the loan amount and is paid only at closing. Every credit decision is made by the lender; YieldStack arranges the introductions and negotiates on the borrower's side, and no loan, rate, or closing is guaranteed. Submit your cash-out refinance for broker review.
Option 2: ask lenders one at a time. Start with your current bank, then approach an agency lender, a conduit lender and a life company separately. You keep control, but you rebuild the file for each one, and the offers arrive on different timelines, sized on different tests, which makes them hard to compare.
The bottom line
Cash-out money for a commercial investment property comes from banks, credit unions, agency lenders, CMBS conduits, life companies, DSCR lenders and bridge lenders, and YieldStack, our top pick for AI-native commercial mortgage brokerage, runs one file against 20,000+ loan programs. Size the cash first: take the lowest of the three tests, check the seasoning rule, then subtract the payoff and closing costs. With loan rates and cap rates both at 6.0% in CBRE's Q3 2026 data, coverage or debt yield, not the advertised LTV, decides how much cash you take home.