The Quick Read: The check starts with your Certificate of Eligibility (COE), the VA document that shows your entitlement. Read how much entitlement is charged to the loan you are paying off, and whether VA can restore it for the refinance. Then test what remains against the loan amount you want. Full entitlement means no VA loan limit, but the lender must still approve the file, subject to lender guidelines.
Entitlement is the amount VA promises to back if you stop paying. It is what lets lenders offer a VA loan with no mortgage insurance. Because a cash-out replaces your current mortgage with a new one, it needs its own guaranty, and that guaranty depends on what your COE shows. Here is how to read it, step by step.
What Is a VA Cash-Out, and Why Does Entitlement Matter?
A VA cash-out refinance replaces your current loan with a new one on different terms. VA describes it as taking cash from your equity or moving a non-VA loan into a VA loan. You need three things: a COE, credit and income that meet VA and lender standards, and a plan to live in the home.
Lendmire’s VA cash-out refinance program page covers the product itself. This article covers the entitlement check that comes first.
Here is the part that surprises people. A streamline refinance (the IRRRL, which refinances an existing VA loan to a lower rate or from adjustable to fixed) does not need a new COE. A cash-out does. It is a new loan with full underwriting, so the lender wants current entitlement on paper.
Key Takeaways
- The COE is the official record. Your memory and your old closing papers are not.
- A COE showing basic entitlement of $36,000 means full entitlement.
- The loan you are paying off usually matters most, because its entitlement can often be restored.
- Full entitlement removes the VA loan limit. It does not remove the lender’s approval step.
- The new loan, including any financed funding fee, cannot exceed 100% of the home’s appraised value.
Step 1: How Do You Get Your COE?
You have three routes. Your lender can pull it for you. You can request it on VA.gov. Or you can apply by mail. Many borrowers let the lender pull it, because the lender can see the same record VA’s system shows.
Do this before you pay for an appraisal. If the COE surprises you, you want to learn that early. A COE is not a preapproval, either. It proves eligibility and entitlement. It says nothing about whether your income and credit fit the loan.
If you request it yourself, the online application asks whether you want entitlement restored to refinance this home as a cash-out. Answer yes if you are paying off the VA loan on that home. If restoration is needed, expect to upload a payoff statement or a settlement statement. That question comes from an older VA guide, so confirm it against the current VA.gov screens.
Step 2: Which Rows of the COE Matter?
Four items on the COE matter for a cash-out. Read them in this order.
| COE item | What it tells you | What to look for |
|---|---|---|
| Basic entitlement | Your starting entitlement | $36,000 means full entitlement |
| Entitlement charged | Entitlement tied up in prior loans | Which loan is the home you are refinancing |
| Conditions | Special restrictions | A cash-out condition tied to one property |
| Funding fee status | Whether you owe the fee | An exempt status, if you have one |
VA’s entitlement page says to look at basic entitlement and the Entitlement Charged column. It also says that if your COE carries a cash-out refinance condition, it can be used only for a cash-out on the property named on the COE. Read that line carefully.
Step 3: Which Loan on the COE Is the One You Are Refinancing?
Match the loan list on the COE to the home you live in. That row is the loan your cash-out will pay off.
This is where same-home versus other-home matters. A cash-out pays off the old loan, so the entitlement charged to it can be restored for the refinance. Entitlement charged to a different VA-financed property that you still own stays tied up. That second kind of charge is what shrinks your available entitlement.
One more point trips people up. Paying down your balance does not free entitlement. Under 38 CFR Part 36, paying down a guaranteed loan does not by itself raise your remaining guaranty. Restoration is a separate process, and it is not automatic in every situation.
If you are weighing another home later, the COE after the refinance is what your next VA lender will look at.
Step 4: How Do You Run the Remaining-Entitlement Formula?
If your COE shows full entitlement and nothing else is charged, skip this step. You have no VA loan limit.
If not, VA’s entitlement page gives the formula for remaining bonus entitlement:
1. Take the county one-unit loan limit.
2. Multiply it by 0.25.
3. Subtract the entitlement already charged on your COE.
Your loan officer will pull the county figure. It varies by county, and it is not quoted here. The regulation behind the formula, 38 CFR 36.4302, subtracts the home-loan entitlement already used from $36,000 and then adds bonus entitlement where it applies. The primary text lives on the eCFR, but this page is easier to read.
Consider two borrowers.
Same-home payoff only. The only VA loan on the COE is the one on the home you are refinancing. Its entitlement is restored through the cash-out. You are typically back at full entitlement for the new loan.
Another VA home still charged. You also own a second home bought with a VA loan. Its charge stays on the COE. Your remaining bonus entitlement is the county calculation minus that charge. The result may support less than a 25% guaranty on the amount you want.
Step 5: Does Your Entitlement Cover the Cash-Out You Want?
Test it this way. With full entitlement, bonus entitlement usually covers 25% of the loan amount. Without it, the lender compares your remaining bonus entitlement to the 25% guaranty the new loan needs.
| Your COE shows | What typically happens |
|---|---|
| Full entitlement | No VA loan limit. Lender still reviews credit, income, and appraisal |
| Partial, after restoration | Remaining bonus entitlement sets the guaranty |
| Another VA home still charged | Possible shortfall that may require a down payment |
If the shortfall exists, VA says the lender may require a down payment. On a cash-out, that means less equity available to you. For how much, speak with a loan officer rather than guessing from a county figure. Lendmire’s piece Can a Veteran With Reduced Entitlement Do a VA Cash-Out at Full Value? walks through that situation.
Across the wholesale programs we place files with, the VA cash-out reaches 100% of the appraised value, including the financed funding fee. It also refinances any loan type into a VA loan. That includes a conventional or FHA mortgage. The entitlement check still applies, since the new loan needs its guaranty.
Type I and Type II: Does It Change the Check?
Yes, in one way. VA Circular 26-19-05 separates two kinds of cash-out. In a Type I, the new loan, including the funding fee, does not exceed the payoff of the loan being refinanced. In a Type II, the new loan exceeds the payoff, so cash goes to you.
The same circular caps the guaranteed amount at 100% of the property’s value. A financed funding fee cannot push the loan above reasonable value.
When the loan you are paying off is a VA loan, seasoning applies. Seasoning is the waiting period between the old loan and the refinance. The program requires the later of 210 days from the first payment and the 6th payment, plus a net tangible benefit, meaning the new loan has to clearly help you. VA’s quick-reference guide also asks the lender to certify a fee recoupment period, the time it takes to earn back the costs.
What If the COE Looks Wrong?
COEs can carry errors. Here is what to do.
| Problem | Likely fix |
|---|---|
| Paid-off loan still shows as charged | Gather the payoff or settlement statement and ask VA to update the record |
| Basic entitlement looks too low | Request a restoration review and have your lender re-pull the COE |
| Old VA loan on the same home not restored | Submit the restoration request with proof of payoff |
| Prior sale, assumption, or foreclosure | Expect a closer review of what is still tied up |
Restoration has limits. Under the guaranty rules in Subpart B of 38 CFR Part 36, restoration is generally tied to disposal of the property and payoff, or to VA being released from liability. If VA paid a loss on a prior loan, that loss generally must be repaid in full. A veteran with a prior VA foreclosure will in most cases have only remaining entitlement. The regulations also allow a one-time restoration if you still own a property bought with a VA loan that you repaid in full.
If a non-veteran assumed one of your VA loans, that entitlement generally stays tied up until the loan is paid off.
Where the General Rule Breaks
A few cases bend the usual path.
- Cash-out condition on the COE. The COE can limit use to one property. Check it before anything else.
- Non-VA loan being paid off. The new VA loan needs full entitlement or enough remaining entitlement. Other VA homes you own still count against you.
- Occupancy. A cash-out requires that you live in the home. That is the rule for a primary residence, and occupancy decides leverage on any other property type.
- A streamline instead. If you only want a lower rate or a fixed loan, the IRRRL skips the new COE and the appraisal. It does not pay you cash.
What Does the Lender Check Versus What Do You Check?
You check the COE: entitlement, charged loans, conditions, funding fee status. The lender checks the whole file. Residual income is the controlling test. That is the money left after your major bills and living costs. The 41% debt-to-income figure is a guideline, not a cap. A higher ratio needs residual income well above VA’s minimum for your family size and region. The wholesale programs we place with start at a 580 decision score. Some lenders set a higher floor. Everything is subject to lender guidelines and full file review.
The funding fee on a cash-out is 2.15% for first use and 3.3% for later use. It is waived for veterans receiving compensation for a service-connected disability and the other exempt groups. It can be financed, as long as the total stays within 100% of value. Confirm your exemption status on the COE before you go further.
Pre-Application Checklist
1. Get your COE and read the four rows above.
2. Match the loan on your COE to the home you are refinancing.
3. Note any other VA home still charged.
4. Look for a cash-out condition and your funding fee status.
5. Gather your payoff statement in case restoration is needed.
6. Confirm the seasoning on the loan you are paying off.
7. Ask your loan officer to run the county figure if you do not have full entitlement.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Key Terms Defined
Entitlement: The amount VA guarantees to a lender if a VA loan goes unpaid.
Certificate of Eligibility (COE): The VA document showing your eligibility, entitlement, charged loans, and funding fee status.
Charged entitlement: The part of your entitlement tied up in VA loans you have used.
Restoration: The process of making used entitlement available again, usually after a payoff.
Bonus entitlement: The layer above basic entitlement that backs larger loans, usually 25% of the loan amount with full entitlement.
Frequently Asked Questions
Can I do a VA cash-out if I already have a VA loan on the home?
Yes, if you meet VA and lender standards and live in the home. The cash-out pays off the old loan, and its entitlement can be restored for the refinance. The loan being paid off also has to meet seasoning, subject to lender guidelines.
Do I need a new COE for a cash-out?
Yes. A cash-out needs a new COE, while the IRRRL does not. Your lender can pull it, or you can request it on VA.gov or by mail.
Does full entitlement mean I can borrow any amount?
No. Full entitlement means no VA loan limit. The lender still has to approve you, and the appraisal must support the value. The new loan cannot exceed 100% of the appraised value, including the financed funding fee.
Does paying down my VA loan free up entitlement?
No, not by itself. Restoration is a separate process, usually tied to a payoff, sale, or the other conditions VA’s regulations set. Gather your payoff proof if you need it.
What if my entitlement is partly used by another VA home?
Your remaining bonus entitlement is the county calculation minus the charge on your COE. If that falls short of the guaranty needed, the lender may require a down payment. Speak with a loan officer about your exact numbers.
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. For the COE steps in more detail, see Lendmire’s guide on how to check entitlement and get your COE before a VA cash-out.
For your own numbers, request a scenario review with Lendmire.
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.
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References
1. VA.gov – Cash-out refinance loan
2. VA.gov – Home loan entitlement and limits
4. Cornell LII – 38 CFR 36.4302
6. eCFR – 38 CFR Part 36 Subpart B
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: How to Handle a Low VA Cash-Out Appraisal on an Existing VA Loan · Does the Lender Matter for a VA Cash-Out on an Existing VA Loan? · Can a VA Cash-Out on an Existing VA Loan Skip the Appraisal?
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.