The Quick Read: The cash is whatever room is left under the 100% ceiling after the new loan pays off your existing mortgage and covers the financed funding fee and any costs rolled in. The ceiling is set by the VA appraiser’s value, not by your own estimate. There is no fixed dollar amount of cash, and the formula is simple subtraction. Most surprises come from the pieces that sit inside the ceiling.
What Does “Up to 100% of Home Value” Actually Mean?
“Up to 100%” means the new loan, fee included, cannot exceed the VA-determined reasonable value of the home. Federal regulation, 38 CFR 36.4306, says the new loan may not exceed 100 percent of the reasonable value, as determined by the Secretary, of the home securing it.
VA cash-out estimate
Seeded with an example value, a typical balance, and a round cash request at the first-use fee; change any field.
Editable benchmark: 7.18% as of November 5, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a VA cash-out refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $193,000 current balance, the full-value VA cap with the first-use funding fee financed, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a VA cash-out refinance quote; a VA loan is priced by the lender at lock. The total loan, funding fee included, is capped at the program leverage on the reasonable value; the fee follows the tier chosen. The cash available is what the cap allows less the balances paid off and the fee, before closing costs, which are not included. The HELOC line is the line program’s combined loan-to-value ceiling applied to the same value and balance. Taxes and insurance are editable estimates. The debt-to-income figure is a guideline; residual income decides a VA file. Licensed in sixteen states for consumer mortgages.
Two words in that sentence matter. “Reasonable value” comes from the VA appraisal. It is not a Zestimate, a neighbor’s sale, or what a prior lender said. And “up to” is a ceiling. Nothing requires you to borrow the maximum, and many borrowers shouldn’t.
The VA cash-out refinance is for taking equity out to pay off debt, cover school costs, repair the home, or other needs. It can also refinance a non-VA loan, such as a conventional or FHA mortgage, into a VA-backed loan. VA’s cash-out loan page also confirms two basics. You need a Certificate of Eligibility, and you must live in the home you are refinancing. The loan comes through a private lender, not from VA directly.
Lendmire’s VA cash-out refinance program page walks through the program from the borrower’s side. The rest of this article does the arithmetic.
The Cash-to-Borrower Formula
Cash to you equals the appraised reasonable value, minus the payoff of existing liens, minus the financed funding fee, minus any closing costs you roll into the loan. That is the whole formula.
Written as a lookup:
- Start with: the VA-determined reasonable value of the home.
- Apply: the loan-to-value you choose, up to 100%. This sets the maximum new loan.
- Subtract: the payoff on your current mortgage and any other liens being paid off.
- Subtract: the funding fee, if you finance it.
- Subtract: any closing costs you finance.
- What remains: your cash.
The funding fee is a percentage of the loan amount. That makes the math slightly circular, because the fee grows with the loan it sits inside. Lenders solve for this inside the ceiling, so the fee is already accounted for when you see the final figure. You don’t have to run the algebra yourself, but you should know the fee is why the cash is smaller than the gap between value and payoff.
A Worked Example With Percentages, Not Dollars
Picture a home the VA appraiser values at a round 100 units, with an existing mortgage payoff of 60 units. Think of each unit as 1% of the appraised value.
At the 100% ceiling, the new loan can be at most 100 units. The first-use cash-out funding fee is 2.15%, so a financed fee takes roughly 2 units. The payoff takes 60. If financed closing costs take roughly 3 more units, what is left is roughly 35 units of cash, or about 35% of the home’s value, not the 40% the raw equity suggests.
| Step | Share of appraised value |
|---|---|
| Maximum new loan | 100% |
| Existing payoff | about 60% |
| Financed funding fee (first use) | about 2% |
| Financed closing costs | about 3% here |
| Cash to you | about 35% |
The takeaway: gross equity is the ceiling on your cash, not the amount you receive. The funding fee, when one applies, and any rolled-in costs come out of that gap. Your lender’s Loan Estimate shows the real figures for your file.
What Reduces Your Cash?
Five things shrink the check, and the funding fee is the one most borrowers underestimate.
The funding fee. For a cash-out refinance the fee is 2.15% on first use and 3.3% on subsequent use. Reduced fee tiers for down payments apply to purchase loans, not refinances. Veterans receiving compensation for a service-connected disability, and the other exempt groups, are waived from the fee, which keeps more of the ceiling available as cash. It is worth confirming your exemption status with VA before you apply.
The financed fee counts inside 100%. This is a point older advice gets wrong. Under VA Circular 26-19-05, VA no longer guarantees a refinance when the loan, including the financed funding fee, exceeds 100 percent of reasonable value. Some borrowers still expect 100% plus the fee. That rule is gone.
Closing costs you finance. Every cost rolled into the balance uses room under the ceiling. Paying some costs out of pocket leaves more of the ceiling for cash, though it means bringing money to the table.
Liens beyond the first mortgage. A second mortgage, a home equity line, or other liens being paid off all come out of the proceeds before you see any cash.
The appraisal. A lower appraisal lowers the ceiling. The payoff, the fee, and the costs stay the same size, so the cash takes the whole hit.
What If the Appraisal Comes In Lower?
A lower appraisal lowers the ceiling on your loan, and the cash falls by the drop in the maximum loan. Using the same sample home, if the appraised value is 5% lower than you expected, the maximum loan at any given LTV falls by about 5% of the expected value times that LTV. At 80% LTV that is roughly 4 points of the home’s expected value, and every one of those points comes straight out of your cash, because payoff, fee, and costs don’t shrink with it. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
| Scenario (same home, same payoff) | Max loan | Approx. cash |
|---|---|---|
| Appraisal at expectation, 80% LTV | 80% | about 15% |
| Appraisal 5% lower, 80% LTV | about 76% | about 11% |
| Appraisal at expectation, 70% LTV | 70% | about 5% |
The pattern is that cash moves point-for-point with the ceiling. Every 10 points of LTV you give up costs you about 10 points of the home’s value in cash, which is why the 70% row sits 10 points below the 80% row. The table’s numbers are modeled assumptions, rounded to show the shape, not a quote.
The appraisal also checks VA minimum property requirements, so repairs can come up. That can add cost or change the plan before the loan proceeds.
Why Your Offer May Be Below 100%
VA permits a cash-out refinance up to 100% of the appraised value, including the financed fee, but an individual lender can set a lower cap of its own. The regulation sets no floor on what a lender may impose. A lender that caps cash-out at 90% or 80% cuts your cash by 10 to 20 points of value compared with the VA maximum. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
That makes this the right question to ask any lender up front: “What is your maximum LTV on a VA cash-out, and does it include the financed fee?” The answer determines whether the math above applies to you at all.
Pricing choices made at closing can also affect how much leverage a VA cash-out loan reaches. Per the eCFR text of 38 CFR 36.4306, the amount of discount charged can affect how much of the property’s value the loan balance may reach after fees. The full 100 percent limit is not available in every pricing scenario. Some state laws may also limit cash-out further.
Do you have to borrow the maximum? No. A smaller loan means less cash and a smaller balance. Matching the loan to the actual need, such as a specific debt payoff or repair budget, often makes more sense than taking every available dollar.
Is There a Dollar Cap on the Loan?
For borrowers with full entitlement, there is no VA loan limit. The wholesale programs Lendmire works with serve amounts up to $4,000,000 with full entitlement, subject to lender guidelines. Limits apply to the guaranty VA provides, which varies by county, not to the loan itself. If you have used part of your entitlement before, a different calculation applies, and VA’s entitlement information is the place to start.
Who Qualifies, and What Does the Lender Review?
Cash-out is a full-documentation loan. Unlike the streamlined IRRRL, it comes with a VA appraisal, income and credit review, and a Certificate of Eligibility. Here is what the file looks at:
- Certificate of Eligibility. VA decides eligibility, and service requirements are VA’s rules. A lender can often retrieve the COE for you.
- Credit. VA sets no minimum score. The wholesale programs Lendmire places files with start at a 580 decision score. Some lenders set a higher floor.
- Residual income. This is the controlling test. It measures what is left each month after your major obligations and living costs. The 41% debt-to-income figure is a guideline, not a cap. A ratio above it calls for residual income well above the table. The CFPB servicemember handout describes compensating factors such as strong credit, low debt, long employment, and savings.
- Occupancy. You must live in the home. Active-duty service members can use the loan for a spouse’s or dependent’s occupancy. Rental properties don’t qualify.
- Net tangible benefit. The loan must meet at least one of eight benefit conditions VA lists. Examples include moving from an adjustable to a fixed rate, increasing monthly residual income, or a new loan at a loan-to-value ratio within the program’s limit. The half-percent rate-reduction and fee-recoupment tests belong to the IRRRL and don’t apply to cash-out.
- Seasoning. When paying off an existing VA loan, the later of 210 days from the first payment and the sixth payment applies. It doesn’t apply when refinancing a non-VA loan into VA, though a lender may set its own waiting period.
What Does Taking Maximum Cash Cost You?
Taking 100% leaves no equity cushion, and the balance and payment go up. Both are tradeoffs worth weighing against what the cash does for you.
No equity buffer. If values soften, you may owe more than the home would sell for. VA requires the lender to give you an estimate of the equity being removed and a warning that it may affect your ability to sell later. Read that disclosure; it exists for a reason.
A bigger balance. A larger loan means a higher monthly obligation, and a lower-rate loan doesn’t automatically offset it. When comparing, put the old and new payments side by side on the same basis, taxes and insurance included in both. A CFPB enforcement action centered on a lender that showed principal and interest only for the new loan while the old payment included taxes and insurance, which made the new loan look cheaper than it was.
Entitlement and future borrowing. The new loan uses entitlement, which can affect later VA borrowing.
The debt-consolidation question. Using cash to pay off credit cards can lower monthly pressure, but it converts unsecured debt into debt secured by your home, stretched over a long term. CFPB research on cash-out refinancing and non-mortgage debt paydown looks at how borrowers use proceeds. If the cards fill back up, the home carries more debt and the benefit disappears.
How Does It Compare With Other Options?
| Factor | VA cash-out | IRRRL (streamline) | Keeping your loan |
|---|---|---|---|
| Cash to borrower | Yes | No | No |
| Appraisal | VA appraisal | None | None |
| Max leverage | Up to 100% | Balance-based | N/A |
| Underwriting | Full review | Lighter | None |
| Funding fee | 2.15% / 3.3% | 0.5% | None |
The IRRRL can’t put cash in your pocket. It covers the balance, closing costs, and a capped discount. Choose it when the goal is a lower rate or an adjustable-to-fixed switch with no cash needed, and the cash-out when you need the equity or want to move a non-VA loan into VA. Compared with other loan types, VA is distinctive because it carries no monthly mortgage insurance, though the financeable funding fee still applies unless you are exempt.
Key Terms Defined
- Reasonable value: the home value VA’s appraiser determines, which sets the 100% ceiling.
- Funding fee: a one-time VA charge, financeable and waived for exempt borrowers, such as veterans receiving disability compensation.
- Net tangible benefit: one of eight VA-listed conditions showing the refinance helps the borrower.
- Residual income: the money left each month after major obligations and living costs, VA’s controlling affordability test.
- Entitlement: the amount of VA guaranty available to you.
- Seasoning: the waiting period before refinancing an existing VA loan.
A “Net Cash” Checklist Before You Apply
1. Get a realistic value estimate, then assume the appraisal could land lower.
2. Add up every lien to be paid off, not just the first mortgage.
3. Confirm your funding fee status: exempt, first use, or subsequent use.
4. Decide which closing costs you’ll finance and which you’ll pay directly.
5. Ask the lender for its maximum LTV on VA cash-out and whether it includes the fee.
6. Compare the new payment with your current one, taxes and insurance included in both.
7. Read the Loan Estimate and the equity-removal disclosure.
Be wary of offers that sound too good to be true. A joint CFPB and VA warning cautions veterans about unsolicited offers promising thousands in cash back, no out-of-pocket costs, or skipped payments. Complaints can go to the CFPB complaint portal.
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. Program details are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
Frequently Asked Questions
Can I really get 100% of my equity in cash?
No. The 100% ceiling applies to the new loan, and the payoff, funding fee, and financed costs all sit under it. Your cash is what remains. On a home with a 60% payoff, a first-use fee and some financed costs leave roughly 35% of value in cash, not 40%.
Does the funding fee go on top of the 100%?
No. Since the 2019 rule change in VA Circular 26-19-05, a financed funding fee counts toward the 100% ceiling. Older advice that allowed 100% plus the fee is outdated. Exempt borrowers, such as veterans receiving service-connected disability compensation, are not charged the fee, so it does not count against the ceiling for them.
Do all lenders offer the full 100%?
No. VA allows it, but lenders can set lower caps, and some stop at 90% or 80%. The wholesale programs Lendmire places VA files with reach 100% of appraised value including the financed fee, subject to lender guidelines and file review. Ask any lender for its maximum before you pay for an appraisal.
Can I refinance a conventional or FHA loan into a VA loan with cash out?
Yes, if you are eligible and live in the home. VA treats it as a cash-out refinance, so the appraisal, full underwriting, funding fee, and net tangible benefit rules apply. The seasoning wait applies to VA-to-VA payoffs, though a lender may add its own waiting period.
Can I use the cash for anything?
Mostly, yes. VA describes uses such as paying off debt, covering school costs, or other needs, and repairs to a home you own and occupy are allowed. The better question is whether the use justifies a larger balance secured by your home.
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.
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
5. CFPB servicemember handout on VA home loans
7. CFPB research on cash-out refinancing and non-mortgage debt paydown
8. CFPB/VA warning on refinancing offers
This article is part of Lendmire’s VA cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Cash Comes Out of a VA Cash-Out Refinance Using VA Entitlement? · Top VA Cash-Out Refinance Providers Up to 100% of the Home’s Value
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.