VA Cash Out Refinance Guidelines and Credit Requirements

What is a VA Cash Out Refinance?

At Lendia, we offer VA cash-out refinances that let eligible veterans refinance their home and take cash out, up to 100% of the home’s value. Credit, property and program requirements apply, and higher loan-to-value options carry pricing adjustments.

A VA cash-out refinance can work in either of these situations:

• You have a VA loan now and want to refinance and take cash out for any purpose.
• You have a conventional, FHA or other loan, you are VA eligible, and you want to refinance into a VA loan with no monthly mortgage insurance.
  • You can take additional cash out in the same refinance.
  • Or you can simply convert your existing loan to a VA loan with no cash out and take advantage of VA rates and no monthly mortgage insurance.
• You must have an existing mortgage. The property cannot be owned free and clear.

To avoid out-of-pocket costs, you can choose to roll closing costs and fees into the new loan balance. Rolling costs in increases your loan amount, so we will show you the numbers before you decide.

Lendia’s Requirements for a VA Cash Out Refinance

At Lendia, we can go up to 100% of your home’s value on a VA cash-out refinance on select programs, with credit score minimums starting as low as 580. Full entitlement, pricing adjustments and approval apply.

Your exact options depend on your credit, income, property and loan amount. Pricing adjustments apply at higher loan-to-value and lower credit scores. A Licensed Lendia CA Loan Officer will confirm what you qualify for.

VA funding fee

• Regular military, first use: 2.15%
• Regular military, subsequent use: 3.30%
• Reserve/National Guard, first use: 2.15%
• Reserve/National Guard, subsequent use: 3.30%

Who is exempt from the funding fee

1. Veterans receiving VA compensation for a service-connected disability.
2. Veterans who would receive that compensation if they were not receiving retirement pay.
3. Surviving spouses of veterans who died in service or from a service-connected disability.
4. Service members on active duty who have been rated eligible for compensation after a pre-discharge disability exam, as of the date of that rating.
5. Veterans entitled to VA compensation who are not receiving it because they are on active duty.

Occupancy

You must live in the home as your primary residence to qualify for a VA cash-out refinance with Lendia.

Appraisal

At Lendia, we order your appraisal through the VA’s appraisal system. The appraiser follows the Uniform Standards of Professional Appraisal Practice (USPAP).

Income and debts

At Lendia, we review your income and debts. A debt-to-income ratio around 41% is typical on a VA loan. Above that, you can still qualify when you meet the VA residual income requirement and have strong compensating factors. There is no single cutoff, and the result depends on your full file and the automated underwriting findings.

Income we can use includes:

• Salary and wages
• Self-employment income
• Military and active-duty pay
• Part-time, second-job and seasonal income
• Rental income
• Alimony and child support
• Unemployment benefits
• Social Security
• Retirement, government, annuity and pension income
• Disability income
• Foster care income
• Interest and dividends
• Capital gains
• Notes receivable
• Tip income
• Trust income

Property requirements

• The home must meet the VA’s Minimum Property Requirements: safe, structurally sound and sanitary, and acceptable for a permanent home in its location.
• A termite inspection and clearance may be required, depending on the area and what the appraiser finds.
• Eligible property types: single-family homes (including townhomes and row homes), 2-4 unit homes, approved condominiums, planned unit developments (PUDs), doublewide manufactured homes that are legally real property and meet local codes, new construction (with a 1-year builder warranty and 10-year protection plan), and homes on leased land (with an approved lease).
• The home cannot be vested in an irrevocable trust.
• Not eligible: mobile homes, mixed-use properties, properties with more than 4 units, manufactured condos, bed and breakfasts, and agricultural properties that produce income (farms, orchards, ranches).

Residual income

Residual income is the money left each month after taxes, debts and housing costs, to cover food, health care, clothing and gas. The VA sets a minimum based on your loan amount and family size. Count everyone who lives in your household, including a spouse who is not on the loan and anyone who depends on you for support. A person who is fully supported by their own verified income that is not used to qualify can be left out of the count. If you or your spouse is active duty or retired and will keep using nearby military facilities, the requirement can drop by at least 5%.

Loan amount $79,999 and below

Loan amount $80,000 and above

Documents for a VA Cash Out Refinance

Personal information

• Name, address and phone number
• Addresses for the past 2 years
• Date of birth and years of school completed
• Social Security number for every applicant (needed to check credit)
• Copy of a valid driver’s license or government ID
• Number and ages of dependents

Employment and income

• Name, address, phone and dates of employment for all employers in the last 2 years
• 30 days of pay stubs
• Last 2 years of W-2s and federal tax returns
• If self-employed: last 2 years of federal tax returns with all schedules
• Social Security, pension or retirement award letters and 1099s, if applicable
• Divorce decree and settlement paperwork, if applicable

Assets

• 2 months of checking and savings statements
• 2 months of retirement account statements
• Any other real estate you own

Property

• Your homeowner’s insurance agent’s contact information or declarations page
• Your HOA’s name and phone number, if applicable
• Your Licensed Lendia CA Loan Officer will order the appraisal.

Credit and debts

• A general idea of your credit cards, student loans, auto loans and other accounts. We pull your credit report, but it can be outdated or wrong.
• Monthly child care costs
• An explanation of any derogatory credit
• Bankruptcy and discharge papers, if applicable
• Paperwork that disproves any errors on your credit report

Still have questions? Call Lendia at 949-333-4636. A Licensed Lendia CA Loan Officer will walk you through it.

Or complete a simple contact form and we’ll get in touch with you today.