VA Cash-Out Loan
VA Cash-Out Refinance
Refinance a VA or Non-VA Mortgage and Potentially Access Available Home Equity
A VA-backed Cash-Out Refinance can replace an existing mortgage with a new VA-backed loan and, when applicable, provide cash from available home equity.
A VA Cash-Out Refinance is different from the VA Streamline Refinance, or IRRRL. An IRRRL is a VA-to-VA refinance, while a VA Cash-Out Refinance can potentially replace either a VA or non-VA mortgage.
Depending on the transaction and available equity, the new loan may also provide cash proceeds to the borrower.
A VA Cash-Out Refinance can potentially refinance an existing VA-backed mortgage or an eligible non-VA mortgage.
VA permits a maximum cash-out refinance loan amount of up to 100% of the property's VA reasonable value, subject to VA and lender requirements.
VA-backed mortgages do not require monthly private mortgage insurance, although a VA funding fee may apply unless exempt.
What Is a VA Cash-Out Refinance?
A VA Cash-Out Refinance is a fully underwritten VA-backed refinance mortgage secured by the Veteran's primary residence.
The new VA loan pays off the existing first mortgage and, depending on the transaction, may also pay eligible liens or provide cash proceeds from available home equity.
The borrower must qualify for the new mortgage based on applicable VA requirements and the lender's underwriting standards.
What Can Cash-Out Proceeds Potentially Be Used For?
Available equity may potentially be used to pay off credit cards, personal loans or other debts.
Cash proceeds may potentially be used for repairs, remodeling or other home improvements.
VA identifies education and other financial needs as possible uses of available cash-out proceeds.
A borrower does not have to currently have a VA mortgage to potentially use a VA Cash-Out Refinance.
How Much Can You Potentially Refinance?
Current VA guidance allows a Cash-Out Refinance loan amount up to 100% of the property's reasonable value as determined by VA.
Importantly, the applicable VA funding fee, if financed, is included within that 100% maximum rather than added on top of it.
Individual mortgage lenders and investors may impose lower loan-to-value limits or additional requirements.
The maximum available loan and cash proceeds depend on the VA appraisal, existing mortgage and lien balances, closing costs, applicable funding fee, borrower qualification, lender limits and other program requirements.
Basic VA Cash-Out Refinance Eligibility
- Qualify for a VA-backed home loan Certificate of Eligibility.
- Meet applicable VA and lender credit, income, debt, residual-income and underwriting requirements.
- Own the property being refinanced before or at closing.
- Occupy the property as the borrower's home in accordance with VA occupancy requirements.
- Complete a VA appraisal establishing the property's reasonable value.
- Satisfy applicable net-tangible-benefit, disclosure and refinance requirements.
VA Cash-Out Requires Full Underwriting and a VA Appraisal
The lender orders a VA appraisal to establish the property's reasonable value and review applicable VA property requirements.
Unlike a standard IRRRL, a Cash-Out Refinance requires the lender to evaluate applicable income, credit, debts, residual income, assets and other underwriting factors.
VA Cash-Out Refinance Types
| Type | Basic Description | Cash / Equity Removal |
|---|---|---|
| Type I | The new loan amount, including the VA funding fee, does not exceed the payoff amount of the loan being refinanced. | The Veteran does not remove equity from the property through the new loan amount. |
| Type II | The new loan amount, including the VA funding fee, exceeds the payoff amount of the loan and/or liens being refinanced. | The Veteran may remove available equity from the property, subject to applicable requirements. |
Net Tangible Benefit Requirement
Depending on the transaction, qualifying benefits can include items such as a reduced interest rate, reduced principal-and-interest payment, moving from an adjustable-rate mortgage to a fixed-rate mortgage, shortening the loan term, eliminating certain mortgage insurance, increasing residual income, or using equity for an applicable purpose.
The lender must evaluate and document the applicable net tangible benefit under VA requirements.
Loan Seasoning for VA-to-VA Cash-Out Refinances
When a VA Cash-Out Refinance pays off an existing VA-guaranteed loan, applicable VA seasoning requirements generally apply.
Current VA guidance generally requires:
- At least six consecutive monthly payments have been made on the VA loan being refinanced.
- The new refinance closes at least 210 days after the first payment due date of the VA loan being refinanced.
VA-to-VA and non-VA-to-VA refinances do not have identical seasoning and refinance-rule treatment, so the specific existing mortgage must be reviewed.
VA Cash-Out Refinance Funding Fee
| VA Cash-Out Refinance | Current Funding Fee |
|---|---|
| First Use of VA Home Loan Benefit | 2.15% |
| After First Use | 3.30% |
| Qualifying Funding-Fee Exemption | 0% |
Certain Veterans, service members and surviving spouses may qualify for a VA funding-fee exemption. One important category includes Veterans receiving or entitled to receive VA compensation for a qualifying service-connected disability.
Funding-fee exemption status should be confirmed for the individual borrower and transaction.
Closing Costs and Loan Amount
Even though VA permits Cash-Out Refinance financing up to 100% of VA reasonable value, the total new loan amount—including a financed VA funding fee—must remain within the applicable VA maximum.
VA Cash-Out Refinance Process
VA Cash-Out Refinance FAQs
Can I use VA Cash-Out if my current mortgage is conventional or FHA?
Potentially, yes. VA Cash-Out refinancing can be used to refinance an eligible non-VA mortgage into a VA-backed mortgage when applicable requirements are satisfied.
Can I refinance up to 100% of my home's value?
VA permits a maximum loan amount of up to 100% of VA reasonable value for a Cash-Out Refinance, subject to borrower qualification, lender requirements and other program rules. A financed VA funding fee must fit within that maximum.
Does every lender offer 100% cash-out financing?
No. Individual lenders and investors may establish lower loan-to-value limits or additional underwriting requirements.
Do I need a VA appraisal?
Yes. A VA Cash-Out Refinance generally requires a VA appraisal to establish the property's reasonable value.
Do I have to live in the property?
VA Cash-Out refinancing is for a residence the eligible borrower owns and occupies as a home in accordance with VA requirements.
Can I use the cash to pay off credit cards?
Available cash-out proceeds may potentially be used to pay off debt or for other financial needs, subject to the final approved transaction.
What is the VA funding fee for a Cash-Out Refinance?
VA currently lists the funding fee at 2.15% for first use and 3.30% after first use. Borrowers who qualify for a funding-fee exemption may pay no VA funding fee.
Is VA Cash-Out the same as an IRRRL?
No. An IRRRL is a streamlined VA-to-VA refinance and generally does not provide cash-out proceeds. VA Cash-Out is a fully underwritten refinance that may refinance a VA or non-VA mortgage and may provide access to available equity.
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U.S. Department of Veterans Affairs — VA Cash-Out Refinance, funding-fee, appraisal, occupancy and refinancing guidance.
VA Cash-Out Refinance information reviewed September 23, 2026.
VA — Cash-Out Refinance Loan
VA Lenders Handbook — Chapter 6: Refinancing Loans
VA — Funding Fee & Closing Costs
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VA Loan Today and VA Help Center LLC are not affiliated with or endorsed by the U.S. Department of Veterans Affairs or any government agency.
VA Cash-Out Refinance availability and qualification are subject to VA eligibility, Certificate of Eligibility, owner-occupancy, property value, appraisal, income, credit, debt, residual income, lender underwriting, investor requirements and applicable law.
VA permits Cash-Out Refinance loans up to 100% of VA reasonable value under applicable program rules. Individual lenders and investors may impose lower maximum loan-to-value ratios or additional requirements. A financed VA funding fee must fit within the applicable VA maximum loan amount.
Cash proceeds depend on the approved property value, existing mortgage and lien balances, closing costs, applicable VA funding fee, lender requirements and borrower qualification. No amount of cash proceeds is guaranteed.
Funding-fee percentages shown on this page reflect current publicly available VA information reviewed September 23, 2026. VA may change program fees or requirements in the future. Funding-fee exemption eligibility is determined under VA requirements for the individual borrower.
Interest rates, discount points, lender credits, closing costs and mortgage terms vary by lender, market conditions and borrower circumstances.
This information is provided for general educational purposes and is not a commitment to lend, an interest-rate quote, a guarantee of loan approval or a guarantee of financial savings.