The VA cash-out refinance lets eligible veterans tap home equity for any purpose — and can even convert a non-VA loan into a VA-guaranteed mortgage. Here’s exactly how it works.
What Is a VA Cash-Out Refinance?
A VA cash-out refinance replaces your existing mortgage (VA or non-VA) with a new VA-guaranteed loan for a higher amount — giving you the difference in cash. Unlike the VA IRRRL, this is a full-documentation loan requiring income verification, a full credit review, and a new VA appraisal.
Two Types of VA Cash-Out Refinance
| Type | What It Does | Max LTV |
|---|---|---|
| Type I — No Net Cash | Converts non-VA loan (FHA, conventional) to VA; new loan does not exceed existing payoff | 100% |
| Type II — Cash to Veteran | New loan exceeds payoff — difference paid to veteran in cash for any purpose | 90% |
Key Requirements
| Requirement | Details |
|---|---|
| Occupancy | Veteran must currently occupy the property as primary residence |
| Listing status | Property must not be listed for sale — must be off market for at least 6 months prior to application |
| Seasoning — payments | At least 6 full payments made on existing loan from first payment due date |
| Seasoning — time | New note date must be at least 210 days after first payment due date of existing loan |
| Appraisal | Full VA appraisal required on all cash-out transactions |
Funding Fee — Cash-Out Refinance
| Use | Funding Fee |
|---|---|
| First-time use | 2.15% |
| Subsequent use | 3.30% |
| Exempt (service-connected disability) | 0% |
Thinking About Tapping Your Home’s Equity?
California home values have appreciated significantly. A VA cash-out refinance may let you access that equity at a lower rate than a HELOC or personal loan. At Lendia, we’ll show you how much equity is available and what your new payment would look like.