The Quick Read: VA allows a cash-out refinance up to 100% of the home’s appraised value, but that is VA’s ceiling, not a promise from any bank. Each lender sets its own maximum, and some stop short of the full amount. A mortgage broker can shop several wholesale lenders and match your file to one whose program reaches the leverage you need.
What Is a VA Cash-Out Refinance?
A VA cash-out refinance replaces your current mortgage with a new VA-backed loan that is larger than your payoff. The difference comes to you as cash. VA doesn’t make the loan. VA explains that you go through a private bank, mortgage company, or credit union.
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.
Three facts shape everything else:
- You need a VA Certificate of Eligibility (COE), and you must live in the home you are refinancing.
- You don’t need an existing VA loan. A conventional, FHA, or USDA loan can be refinanced into a VA loan.
- The new loan can reach 100% of the appraised value, including the financed funding fee, across the wholesale programs Lendmire places files with.
Lendmire’s VA cash-out refinance program page covers the program overview.
Key Terms Defined
Certificate of Eligibility (COE): The VA document that confirms your service qualifies you for a VA home loan.
Reasonable value: The value VA’s appraisal assigns to the home, which sets the ceiling on the new loan.
Funding fee: A one-time VA charge that can be financed into the loan and is waived for exempt borrowers.
Residual income: The money left each month after major obligations and living costs, which is the controlling VA underwriting test.
Net tangible benefit: A concrete improvement to the borrower’s position that the refinance must deliver.
Type I and Type II: VA’s labels for a cash-out that stays at or below the old payoff versus one that exceeds it.
Why “Up to 100%” Doesn’t Mean Every Bank Offers It
The 100% figure comes from VA’s own rules. The VA Lenders Handbook says the loan amount may not exceed 100 percent of the reasonable value VA determines. Closing costs and the funding fee can be paid from loan proceeds, but they have to fit under that same cap.
Many lenders still stop lower. The main reason sits with loan investors, not with VA. VA loans are commonly packaged into securities through the government mortgage-bond program, and the government mortgage-bond program restricted the standard pooling of VA cash-outs above 90% loan-to-value. Those loans can still go into custom pools, so some lenders write them and others don’t. The official rule text sits in the government mortgage-bond program’s MBS Guide, Chapter 24.
That’s why “which banks offer 100%?” has no single answer. The lenders that write the full amount depend on their investor relationships, their credit overlays, and the borrower’s file. Some also cap leverage by credit score.
One older belief is worth retiring. Some borrowers still hear that VA caps cash-out at 90%. Today the 90% line is mostly a pooling and investor matter. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
How Lendmire Approaches the “Which Bank?” Question
Lendmire is a mortgage broker. It doesn’t lend. It arranges VA loans through wholesale lenders, and it doesn’t name or rank them here, because the right lender depends on your situation: credit profile, how much leverage you need, the property, and your documentation.
Here is what working VA files across wholesale programs looks like in practice. The leverage question gets settled early, before an appraisal is ordered. A borrower who needs the full 100% is steered toward programs that write it. A borrower who only needs a modest amount of cash may do fine with a program that stops lower. Asking about the lender’s maximum at the start saves a wasted appraisal.
The programs Lendmire places VA loans with start at a 580 decision score. VA itself sets no minimum credit score. Lenders set their own, and some set higher. Everything here is subject to lender guidelines and full file review, and none of it is a commitment to lend.
How Is a VA Cash-Out Underwritten, Step by Step?
A VA cash-out gets full underwriting. It is not a streamline. Here is the sequence:
1. Get your COE. You can get it through a lender, VA.gov, or by mail, per the VA home loans page.
2. Full credit, income, and occupancy review. VA says you must meet credit, income, and occupancy requirements from both VA and the lender.
3. VA appraisal. Unlike the interest rate reduction loan (IRRRL), a cash-out needs a full appraisal. The appraised value sets the cap on the new loan.
4. Loan classification. The loan is Type I or Type II, which affects some of the rules that apply.
5. Net tangible benefit and disclosures. The lender documents a benefit to you and submits cash-out disclosures to VA. VA-to-VA refinances carry additional certifications. VA’s cash-out guide lists these items. It is an older document, so treat it as a description of the process, not the final word on current requirements.
6. Closing. The new loan pays off the old liens, and any remaining proceeds go to you. Because this is a consumer mortgage, you receive a Loan Estimate and a Closing Disclosure.
The Controlling Test: Residual Income
Residual income decides VA underwriting. The 41% debt-to-income figure is a guideline, not a cap. A ratio above it needs residual income well above the VA table. That’s a real difference from conventional underwriting, where the debt ratio does most of the work.
What Counts Inside the 100% Cap?
Everything fits under one ceiling: the payoff of your old loan, the closing costs you finance, and the financed funding fee. Whatever is left is your cash.
The funding fee for a VA cash-out refinance is 2.15% for first use and 3.3% for subsequent use, per VA Circular 26-23-06, Exhibit B. The same exhibit says reduced funding fee rates don’t apply to refinance loans, so a bigger equity cushion doesn’t lower the fee. The fee is waived for veterans receiving compensation for a service-connected disability and for the other exempt groups.
Here is a worked example in percentages only. Picture a home appraised at 100% of value. Your current loan balance is 60% of that value. The refinance has a 100% cap. The funding fee and any financed closing costs come out of the remaining 40%, and what’s left is your cash. A first-use borrower pays the 2.15% fee on the whole new loan amount, so maxing out the cap leaves noticeably less usable cash than the 40% headline suggests. The larger the loan, the larger the fee.
VA loans carry no mortgage insurance of any kind. That’s a real advantage over a conventional cash-out at high leverage. It also means the funding fee is the main cost VA adds.
VA Cash-Out vs. the Other Options
| Factor | VA Cash-Out | Conventional Cash-Out | HELOC / Home Equity Loan | VA IRRRL |
|---|---|---|---|---|
| Max leverage | Up to 100% of value | Lower, lender-set | Lower, lender-set | No cash out |
| Mortgage insurance | None | Often at high leverage | Not typical | None |
| Appraisal | Full VA appraisal | Usually | Usually | Not required |
| Replaces first loan | Yes | Yes | No | Yes |
| Existing VA loan needed | No | No | No | Yes |
A home equity loan or HELOC leaves your first mortgage alone, which matters if your current loan is already well structured. A VA cash-out replaces it. The right choice depends on what your existing loan looks like, how much cash you need, and whether you plan to stay put.
Where the General Rule Breaks
Several situations change the answer:
- Lender overlays. A lender can set a lower maximum than VA, and some tie it to credit score.
- Occupancy. You must live in the home. This is not a program for rental or investment properties. VA’s Buyer’s Guide describes cash-out as a refinance of a home you own and occupy.
- Surviving spouses. A surviving spouse who wasn’t on the original loan can only do a cash-out refinance, after qualifying as a surviving spouse.
- Alteration and repair. VA can guarantee a loan for alteration and repair as a cash-out refinance of a home you own and occupy.
- Statute versus VA’s own rules. Federal law, at 38 U.S.C. §3709, sets seasoning and recoupment tests for refinances, but subsection (d) carves out cash-out refinances. Those follow VA’s separate regulations.
- State law. Some lenders say the full 100% applies only where state law allows it. Ask a loan officer whether your state affects the leverage available.
On seasoning and benefit tests: across the programs Lendmire places, the VA cash-out carries seasoning of the later of 210 days from the first payment and the 6th payment, plus a net tangible benefit, which is one of VA’s eight listed benefits. The half-percent rate-reduction and fee-recoupment tests are IRRRL rules. They don’t apply to the VA cash-out.
How Do You Check a Lender’s Actual Maximum?
Ask directly, and ask early. Here is a short checklist:
- What is your maximum loan-to-value on a VA cash-out for my credit profile?
- Does that maximum include the financed funding fee?
- Do you set a credit score floor above VA’s?
- Does my state or property type change the maximum?
- What are the full closing costs on the Loan Estimate?
Compare offers on total cost, not just maximum leverage. A lender that reaches 100% isn’t the right fit if the rest of the file costs more than you’d pay elsewhere. A broker can compare several wholesale lenders on one application, which is the practical edge over asking one bank at a time.
Banks, credit unions, and non-bank mortgage companies all can offer VA loans. The CFPB notes that many, but not all, lenders offer VA home loans, so asking each one whether it does is part of the process. Size alone doesn’t tell you whether a lender writes high-leverage cash-outs.
When Is Borrowing the Full 100% a Bad Idea?
Skip it when you don’t need the cash. A cash-out raises your loan amount and the interest you pay over its life, and VA News warns about closing costs, restarted amortization, and interest on the cash over 30 years.
Think twice in these situations:
- You’d leave no equity cushion. If values dip, you could owe more than the home is worth.
- Your current loan is working well and you want only a small amount of cash. A home equity loan or HELOC may fit better.
- You’d be borrowing for spending that doesn’t build value or cut debt.
- A solicitation promises cash back, no out-of-pocket costs, or skipped payments.
That last one deserves attention. A “no-cost” refinance still has costs, built into the balance or the loan terms. The CFPB also took enforcement action over deceptive cash-out marketing aimed at veterans. Cash isn’t free equity.
The flip point: a cash-out makes sense when the cash pays off higher-cost debt or funds an improvement that adds value, and you’ve confirmed the new loan leaves you better off overall.
What Should You Prepare?
Gather these before you apply:
- Your COE, or the information needed to request one
- Recent pay documentation and proof of income
- Your current mortgage statement
- Proof the home is your primary residence
- Information about other monthly obligations, since residual income depends on them
A VA cash-out refinance can refinance any loan type into VA, including a non-VA loan, and the funding fee for it is 2.15% for first use and 3.3% for subsequent use unless you are exempt. That surprises some borrowers, so ask your loan officer which fee applies to your file.
Frequently Asked Questions
Do all banks offer a VA cash-out refinance up to 100%?
No. VA permits up to 100% of reasonable value, but each lender picks its own cap. Investor pooling rules, credit overlays, and state law can all lead a lender to stop lower. Ask each lender for its maximum on your file.
Do I need an existing VA loan to do a cash-out refinance?
No. A cash-out can refinance a conventional, FHA, or USDA loan into a VA-backed loan. The IRRRL is the product that requires an existing VA loan. You still need a COE and must live in the home.
Is mortgage insurance required on a VA cash-out?
No. The main VA cost is the funding fee, which is 2.15% for first use and 3.3% after for a cash-out. It can be financed, though it must fit under the 100% cap, and exempt borrowers don’t pay it.
Can I use a VA cash-out on a rental property?
No. You must live in the home you’re refinancing, so occupancy decides eligibility.
Does a VA cash-out need an appraisal?
Yes. A VA appraisal sets the reasonable value, and the new loan can’t exceed the cap on that value. The IRRRL is the streamline that skips it.
If You’re Weighing Your Options
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. Reach the team at 828-256-2183 or request a quote. Program details are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving homeowners and home buyers in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. 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
1. VA.gov: Cash-out refinance loan
2. VA Pamphlet 26-7, Chapter 6: Refinancing Loans
4. Ginnie Mae’s MBS Guide, Chapter 24
6. VA
7. VA.gov: Eligibility for VA home loan programs
9. VA Circular 26-23-06, Exhibit B
10. Buyer’s Guide
11. 38 U.S.C. §3709
12. CFPB – VA home loans handout
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 to Roll Several Loans Into One VA Cash-Out Refinance · How Much Cash Comes Out of a VA Cash-Out Refinance After Owning Under a Year? · How Lenders Underwrite a VA Cash-Out Refinance for Veterans Tapping Home Equity
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.