The Quick Read: Yes, sometimes. VA rules let a loan reach 100% of the appraised value, with the financed funding fee counted inside that ceiling. But “100% of value” is not “100% of your equity in cash,” and not every lender will go that far. Approval depends on the appraisal, your credit, your residual income, and the lender’s own limits, all subject to lender guidelines and full file review.
Can the VA Actually Allow a 100% Cash-Out?
Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
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: 7.24% as of October 29, 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.
Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
VA rules allow it. The ceiling is 100% of the home’s reasonable value, which is the number the VA appraiser sets. That is the VA’s limit.
Lendmire’s VA cash-out refinance program page lays out the program basics. Here is how it works in practice. The VA cash-out can refinance any type of existing loan into a VA-backed loan. That includes a conventional or FHA mortgage. On full entitlement there is no VA loan limit and no mortgage insurance of any kind. The loan must be on a home you live in. VA states that a cash-out is made by private lenders, not by VA itself, on its cash-out refinance loan page.
You also need a Certificate of Eligibility, or COE, from VA. The COE decides whether you are eligible. The service rules behind it are VA’s, not a lender’s.
Rental property or a second home? Occupancy decides the leverage. This program is for your primary residence only.
“100% of Equity” vs. “100% of Value”
Those are different numbers. Your equity is the home’s value minus what you owe. The loan-to-value ratio, or LTV, is the total new loan divided by the appraised value. At 100% LTV, the new loan equals the whole appraised value. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
VA’s Circular 26-19-05 says the funding fee counts toward the total loan. A financed fee cannot push the loan above the reasonable value. So the fee comes out of the same 100%. At full LTV, any part of the fee that would exceed 100% has to be paid in cash at closing.
Here is a modeled example using percentages only. These are illustrative assumptions, not market data. Say you owe 60% of the appraised value. Your equity on paper is 40%. Use the 2.15% first-use cash-out fee and finance it. The base loan plus the fee must fit inside 100%, so the base loan tops out near 98% of value. Your cash lands near 38% of value, before any other closing costs. If you were exempt from the fee, it would be closer to the full 40%.
What Shrinks Your Cash
Four things stand between your equity and your check. They are the payoff of your current loan, the appraisal, the funding fee, and closing costs.
| Item | Effect on your cash |
|---|---|
| Current loan payoff | Comes out first |
| Appraised value | Sets the 100% ceiling |
| Funding fee | Counts inside the ceiling |
| Closing costs | Reduce proceeds further |
The appraisal is the biggest swing. A low value shrinks the ceiling and the cash with it. The funding fee is a mechanical charge, not a price Lendmire sets. For a cash-out it is 2.15% on first use and 3.3% on later use. It is waived for veterans receiving compensation for a service-connected disability and the other exempt groups. The lower down-payment fee tiers do not apply to a refinance.
Why Many Lenders Stop at 90%
The 90% line is a pooling rule, not a VA rule. Lenders usually sell VA loans into securities backed by Ginnie Mae. HUD announced that VA cash-out loans above 90% LTV could no longer go into the standard Ginnie Mae pools, and said it restricted them because cash-out refinances are prone to fast prepayment. The loans can still go into custom pools if seasoning and payment requirements are met, per Chapter 24 of the Ginnie Mae MBS Guide.
That turns 100% into a market-appetite question. Fewer lenders choose to offer it. Some set their own overlays, meaning extra rules stricter than VA’s, such as a higher credit floor or a lower LTV cap. Do not treat those as VA policy.
Wholesale lenders vary here. Lendmire is a mortgage broker, not the lender. It places files with wholesale lenders whose programs reach 100% of the appraised value, financed fee included. That is the filter that matters when you shop.
Another myth is worth clearing up. People say VA caps cash-out at 90%, or that VA has no LTV ceiling at all. Neither is right. The ceiling is 100%. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
What Lenders Look At to Approve You
Full underwriting applies, just like a purchase. A cash-out is not a streamline. Expect a VA appraisal and a full look at your file.
| Factor | Helps | Hurts |
|---|---|---|
| Appraisal | Value at or above expectation | Value comes in low |
| Credit | Clean history, higher score | Recent lates, collections |
| Residual income | Well above the VA table | Thin leftover after bills |
| Seasoning | Waiting period met | Loan too new |
| Occupancy | You live there | Home is a rental |
Here is how each one works.
- Credit. VA sets no minimum credit score. The wholesale programs Lendmire places VA loans with start at a 580 decision score. Some lenders set a higher floor.
- Residual income. This is the money left each month after your debts, taxes, and living costs. It is the controlling test on a VA loan. The 41% debt-to-income figure is a guideline, not a cap. A ratio above it needs residual income well above the VA table.
- Seasoning. This is the waiting period before you can refinance. The VA cash-out uses the later of 210 days from your first payment and your sixth payment.
- Net tangible benefit. The new loan must help you in one of VA’s eight listed ways. One example is eliminating monthly mortgage insurance on your old loan. Another is moving from an adjustable to a fixed loan. The half-percent reduction and fee-recoupment tests belong to the IRRRL, which is the VA’s streamline refinance. They do not apply to the cash-out.
Lenders also decide on file quality. Lendmire sees the same pattern across files. The borrowers who reach the ceiling usually have a clean appraisal, steady income, and a clear reason for the cash.
How It Compares
The VA cash-out reaches higher than most alternatives. Here is the side-by-side.
| Option | Reach | Mortgage insurance |
|---|---|---|
| VA cash-out | Up to 100% of value | None |
| Conventional cash-out | Typically lower | Not required on a cash-out |
| Home equity loan or HELOC | Second lien on top | Not applicable |
| VA IRRRL | No cash back | None |
The IRRRL refinances an existing VA loan with no VA appraisal and a 0.5% funding fee, unless exempt. It cannot give you cash. Conventional cash-outs are typically capped lower, though limits shift by lender and property. If you are weighing options, Lendmire’s piece on the best VA cash-out refinance program up to 100% of the home’s value walks through that choice.
Risks, and When Not to Take 100%
Borrowing the full value leaves you no cushion. If prices dip, you could owe more than the home is worth. Closing costs and the fee come out of that same cushion.
The monthly budget changes too. The CFPB’s guide to using home equity says a cash-out replaces your mortgage with a larger one. It may lengthen your payoff time and raise the monthly payment. Your loan terms reset. The same guide notes that cash from a cash-out is a loan you must repay, and your home is at risk if you miss payments.
Picture a few cases where taking less, or nothing, makes sense:
1. You hold a very favorable loan today and would swap it for a bigger one.
2. You plan to sell soon, and the closing costs would not pay back.
3. You want the cash to pay off credit cards. Debt that was unsecured becomes debt tied to your home, which can raise the stakes if a payment is missed.
4. Your residual income is already tight.
Taking only the cash you need keeps some equity as a buffer. It also keeps the funding fee lower, since the fee is a percentage of the loan.
Key Terms Defined
- Equity: the home’s value minus what you owe on it.
- LTV (loan-to-value): the total new loan, funding fee included, divided by the appraised value.
- Reasonable value: the value the VA appraiser sets, which acts as the denominator in the LTV formula.
- Funding fee: a one-time VA charge that can be financed and is waived for exempt veterans.
- COE (Certificate of Eligibility): the VA document that confirms your eligibility.
- Residual income: what is left each month after debts, taxes, and living costs.
- Net tangible benefit: a real, listed improvement to your finances that the refinance must deliver.
- Seasoning: the waiting period between your first payment and a refinance.
- Type I and Type II cash-out: Type I does not exceed the payoff of the old loan, so no cash returns. Type II exceeds the payoff, so cash comes back to you.
A Step-by-Step Path to Approval
1. Get your COE from VA. 2. Confirm your seasoning date. 3. Decide how much cash you need, and why. 4. Ask lenders whether they use the full 100% ceiling or stop at 90%. 5. Ask how they treat the funding fee at full LTV. 6. Ask what credit and residual-income floors they apply beyond VA’s. 7. Order the VA appraisal and plan around a value that may come in low.
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. Call 828-256-2183 or request a quote through Lendmire.
Frequently Asked Questions
Will I receive 100% of my equity as cash?
No. The funding fee sits inside the 100% ceiling, and your payoff and closing costs come out too. A fee-exempt veteran keeps more of the equity than a first-time user who finances the fee.
Does VA set a minimum credit score for a cash-out?
VA does not publish one. Lenders set their own floors. The wholesale programs Lendmire places VA loans with start at a 580 decision score, subject to lender guidelines and full file review.
Can I refinance a non-VA loan into a VA cash-out?
Yes. The VA cash-out can pay off any loan type, including conventional and FHA mortgages. You still need a COE, and you must live in the home.
What happens if the appraisal comes in low?
The ceiling drops with it. The 100% limit applies to the appraised value, not the price you hoped for. A lower value shrinks the loan and your cash, and can make the refinance not worth doing.
Do I need to wait before a VA cash-out?
Yes. The VA cash-out carries seasoning of the later of 210 days from your first payment and your sixth payment. The lender confirms the exact date from your payment history.
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.
For the program’s current guidelines, see VA loan programs.
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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
3. HUD press release on cash-out refinance risk
4. Ginnie Mae MBS Guide, Chapter 24
5. CFPB: Using your home equity guide
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: VA Cash-Out Refinance Requirements With Little Equity · Can You Get Approved for a VA Cash-Out Refinance With a 580 Credit Score? · Can You Get Approved for a VA Cash-Out Refinance in Six Months?
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.