The Quick Read: Yes, a VA cash-out refinance can reach 100% of the home’s appraised value. That 100% is a ceiling, not a promise. The new loan must cover your old payoff, the financed funding fee and any costs rolled in. Whatever is left is your cash. Your credit, income and the lender’s own rules decide how close you get.
What Does “Full Home Value” Actually Mean?
Full value means the total new loan can equal the appraised value of the home. It does not mean you walk away with a check for the whole value.
Think of the new loan as a stack. At the bottom sits the payoff of your current mortgage. On top of that goes the VA funding fee, if you finance it. Any closing costs you roll in come next. Cash to you is only what remains under the ceiling.
Here is the part most people miss: the ceiling counts everything. A home worth a given amount can carry a new loan of that amount, and not a penny more. Every item in the stack eats into your cash.
Lendmire’s VA cash-out refinance program page covers the basics of how this loan works. The VA guarantees the loan. A private lender makes it. Lendmire is a mortgage broker that arranges these loans through wholesale lenders, and it does not lend the money itself.
Two more points on scope:
- The program works on a loan you already have, whether it is a VA loan or another type. A cash-out can move a non-VA mortgage into a VA loan.
- Across the wholesale programs Lendmire works with, VA cash-out reaches 100% of appraised value including the financed fee. That is subject to lender guidelines and full file review.
A Worked Example in Percentages
Say you own a home that appraises at 100% of its value, and your current mortgage balance is 60% of that value. Run the numbers this way. These are modeled assumptions, not market data.
| Scenario | New loan (% of value) | Equity left | Room for fee, costs and cash |
|---|---|---|---|
| Full-value cash-out | 100% | 0% | 40% |
| Partial cash-out | 80% | 20% | 20% |
| No cash, payoff only | About 60% plus fee | Most of it | Fee and costs only |
Look at the right-hand column. In the full-value row, the funding fee and any rolled-in costs come out of that 40% first. What remains is your actual cash.
That is the gap between “full value” and “full equity in your pocket.” Nobody nets the headline number. Fees and payoff items always take a bite.
The partial row shows the trade. You get less cash, but you keep a cushion. Keep that cushion in mind. It matters more than most borrowers expect, and the risks section below returns to it.
Why a Lender May Stop Short of 100%
The VA allows 100%, but a lender can set a lower limit. The VA says lenders follow its standards and may add their own, such as a higher credit score or an updated appraisal. VA.gov states this plainly.
So “VA allows it” and “this lender offers it” are two different statements. Some lenders cap cash-out below the federal ceiling. Others set a higher credit floor for the high-leverage version.
Across the wholesale programs Lendmire places files with, the VA sets no minimum credit score. The programs start at a 580 decision score. A file near that floor gets a closer look than a strong one. Treat 580 as the starting line, not a finish.
Before you commit to a lender, ask these questions:
1. What is your maximum loan-to-value on a VA cash-out, including the funding fee?
2. Does the cap change with my credit score?
3. Do you require a new appraisal, and who orders it?
4. How do you treat my debt-to-income ratio and residual income?
5. Will you give me the Loan Estimate with the equity being removed spelled out?
That last question is not a courtesy. The rules require the lender to give you a loan comparison and an estimate of the home equity you are removing. The official text is on GovInfo.
What the Federal Rule Says
The rule itself is short on this point. Under the VA’s cash-out regulation, 38 CFR 36.4306, the new loan cannot exceed 100% of the home’s “reasonable value,” as the VA determines it. The VA appraisal sets that value.
This was not always so. An older federal limit capped cash-outs at 90% of value. The VA later moved the cap to 100%, as the Federal Register rulemaking explains. Many articles still repeat the old number.
The 90% figure did not vanish, though. It now shows up as one of several ways to pass the net tangible benefit test. That test asks whether the refinance actually helps you. A loan at 90% of value or less can pass on that basis. Other qualifying benefits include moving from an adjustable to a fixed loan, or raising your monthly residual income.
So a 100% loan needs a benefit that works for your situation. Your lender will sort out which one fits your file.
The Funding Fee Counts Toward the 100%
The VA funding fee is a one-time charge on most VA loans. You can finance it, but it sits inside the ceiling.
Across the programs Lendmire works with, the cash-out fee is 2.15% for first use and 3.3% for later use. Those figures are subject to lender guidelines and the VA’s current fee chart. Veterans who receive compensation for a service-connected disability are exempt, along with a few other groups. VA.gov lists the exemptions and confirms there is no monthly mortgage insurance on a VA loan.
Here is why this matters for a full-value loan. If the fee pushes the total above 100% of reasonable value, you pay the overage in cash at closing. A financed fee also raises your balance, which trims the cash you can take.
For an exempt veteran, the stack is lighter. No fee means more of the 100% stays available for cash. Anyone who might be exempt should confirm status on the Certificate of Eligibility before comparing options.
Who Qualifies
Full value or not, the same checklist applies. The VA program has a short list of conditions, and the lender adds its own review.
- Certificate of Eligibility (COE). The VA decides eligibility. Service requirements are the VA’s rules.
- Occupancy. The cash-out is for the home you live in. A rental or second home does not fit this program. For active-duty members, a spouse or dependent living there can count.
- An existing loan to refinance. A cash-out replaces a current mortgage or lien. A home owned free and clear generally does not fit the VA’s definition.
- Seasoning. The program carries the same waiting rule as a streamline. That means the later of 210 days from your first payment and your sixth payment.
- Credit. The wholesale programs Lendmire works with start at a 580 decision score.
- Residual income. This is the controlling test. It measures what is left each month after your major obligations and living costs.
- Debt-to-income (DTI). The 41% figure is a guideline, not a cap. A higher ratio needs residual income well above the VA table.
Nothing here is a commitment to lend. Every item gets confirmed in a full file review.
On loan size: with full entitlement, the VA sets no loan limit. The wholesale programs Lendmire places with serve amounts up to $4,000,000 on full entitlement. Even so, the lender’s view of your credit, income and assets sets the real size.
Entitlement is the VA’s guarantee that backs your loan. If an earlier VA loan still uses part of it, you have reduced entitlement. The lender then checks how much guarantee remains, and a down payment may be needed. That can change what “full value” means for you. Lendmire’s piece Can a Veteran With Reduced Entitlement Do a VA Cash-Out at Full Value? walks through that case. Speak with a loan officer about your exact situation.
The Appraisal Sets the Ceiling
The 100% is measured against the VA appraisal. It is not your tax assessment. It is not an online estimate. Those numbers can sit far from the appraiser’s.
A low appraisal lowers the maximum loan. If the value comes in below what you expected, the stack no longer fits. You have three choices. You can take less cash, you can bring cash to closing, or you can pause.
A few habits help:
- Keep a list of recent improvements, with dates and costs.
- Note recent sales of similar homes nearby.
- Ask your lender early what happens if the number comes in short.
Don’t plan the cash before the appraisal is in. That is how people end up with a renovation budget and no loan to fund it.
The Risk of Leaving Zero Equity
At 100%, there is no cushion. If values slip after you close, you owe more than the home is worth. That is called being underwater.
It matters most if you need to sell. A sale costs money. Agent fees and closing costs come out of the sale price. With no equity, you may have to bring cash to the table.
It also limits your next move. Refinancing again is harder with thin or no equity.
This is the “can versus should” question. Plenty of veterans can take the full amount. Fewer need to.
| Use of the cash | Full value fits? | Why |
|---|---|---|
| Paying off high-cost unsecured debt | Often reasonable | Swaps debt for a lower-cost loan, but you must stop re-borrowing |
| Renovation that adds value | Sometimes | Value may rise, but it is not certain |
| Emergency reserves | Rarely needed in full | A smaller draw keeps equity intact |
| A purchase you want but do not need | Usually a poor fit | The home secures the loan |
Converting credit card balances into a larger mortgage is a real trade. The payment on the debt can fall. The debt itself now lasts as long as the mortgage, and the home secures it.
A partial cash-out is often the calmer path. You take what the project or payoff needs and leave the rest as equity.
What If You Only Want a Lower Payment?
Then a cash-out may be the wrong tool. The VA’s streamline, the IRRRL, refinances an existing VA loan only. It generally gives no cash. It needs no VA appraisal and carries a 0.5% fee unless you are exempt. It also requires a net tangible benefit and the same seasoning.
If your goal is a better term and not cash, read that first.
A cash-out can also refinance a non-VA loan into a VA loan. An IRRRL cannot. That is one of the cleaner reasons a veteran with a conventional or FHA mortgage might choose a cash-out.
Key Terms Defined
Appraised value (reasonable value): The home’s worth as set by a VA appraisal, which caps the new loan.
Cash-out refinance: A new mortgage that pays off the old one and gives you the difference in cash.
Funding fee: A one-time VA charge on most loans that you can finance, unless you are exempt.
Entitlement: The amount of the VA’s guarantee available to you, which affects loan size and down payment.
Residual income: The money left each month after major obligations, which is the VA’s controlling test.
Net tangible benefit: A requirement that the refinance must improve your situation in a way the rules recognize.
Seasoning: The waiting period a loan must age before a refinance can happen.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Your Next Step
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches. Bring your current payoff, your best guess at value and your goal for the cash. The comparison starts there.
Frequently Asked Questions
Can I take cash out on a home I own free and clear?
Generally not under the VA’s cash-out rules. A cash-out refinances an existing loan or lien, and a home with no lien does not fit that definition. A loan officer can confirm how your situation would be treated.
Does the funding fee reduce the cash I can take at 100%?
Yes. A financed fee sits inside the 100% ceiling, so it lowers your cash dollar for dollar. If the fee would push the loan over 100% of value, you pay the excess at closing. Exempt veterans skip the fee, which leaves more room.
What if my appraisal comes in low?
The maximum loan falls with it. You can take less cash, bring money to closing or wait. A lender can tell you early what a lower value would do to your numbers, so ask before you plan around a figure.
Is 90% still the VA limit?
No. That was the older cap. Today the ceiling is 100% of reasonable value, and 90% survives as one way to pass the net tangible benefit test. Lenders may still set their own lower limits.
Will every lender let me borrow the full 100%?
No, since lenders can add standards above the VA’s. Some set a lower loan-to-value cap or a higher credit floor. Ask each lender for its cap, in writing, before you apply.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges FHA, VA, conventional and jumbo home purchase and refinance financing in 16 states through wholesale lenders. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
2. GovInfo, 38 CFR 36.4306 (official print edition)
3. eCFR, 38 CFR 36.4306 (VA cash-out refinance rule)
4. Federal Register, revisions to VA cash-out home refinance loans
5. VA.gov, Funding fee and closing costs
This article is part of Lendmire’s VA Loans series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: VA Cash-Out Occupancy Rules for Veterans and Spouses · VA vs Conventional Cash-Out Requirements for a Veteran · 4 Myths About the Risk of a VA Cash-Out Refinance
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.