The Quick Read: No, not the cash-out terms themselves. The questionnaire is a gate, not a dial. If the condo project is VA-eligible, the cash-out runs on the same rules as any other home: up to 100% of the appraised value, including the financed funding fee, plus a net tangible benefit. If the project is not eligible, the loan cannot close at all. A “high-cost state” does not change this, because VA limits work by county, not by state.
What Does the Questionnaire Actually Do?
It does not set your loan amount, your leverage, or your funding fee. Those come from the program. The questionnaire feeds one question: is this condo project acceptable to VA?
The questionnaire is a lender and HOA document, not a VA form. The lender sends it to the association, and the association answers questions about the building. Typical topics are owner-occupancy, delinquent dues, litigation, insurance and reserves. The answers help the lender decide whether the project can support a VA loan.
Across the wholesale programs Lendmire places VA files with, the pattern is consistent. Clean questionnaire, eligible project, normal cash-out. Problem answers, and the file stalls before it ever reaches the numbers.
Lendmire’s VA cash-out refinance program page covers the borrower side of the loan. This article covers the building side.
Why Does the Condo Have to Be Approved?
Because VA treats condos differently from houses. Under VA Pamphlet 26-7, Chapter 16, condominiums must be approved by VA before any unit is eligible for a VA guaranty. Planned unit developments do not need that project approval.
Approval is for the whole project, not your unit. VA keeps a nationwide approved list, and the lender checks it. Some sources claim VA allows single-unit approvals. The handbook describes project approval, so treat that claim with suspicion.
Here is the catch for refinancers. The building that was fine when you bought may not be in good standing today. The lender checks the project’s status again. A guaranty that depends on the condo can fail even when your own file is clean.
If HUD or USDA already approved the project, VA may accept that without a separate review. The rules there are dated and conditional, so the lender confirms it. Do not assume FHA-approved means VA-approved.
Does the Questionnaire Change the Cash-Out Amount?
No. The cap is the same for a condo, a house, or a townhome. The VA Lenders Handbook, Chapter 3 says the loan, including the funding fee, may not exceed 100% of VA reasonable value. The Federal Register rulemaking revising 38 CFR 36.4306 set that 100% cap.
Some lenders still set a lower cap of their own. That is a lender overlay, not a VA rule. Across the wholesale programs Lendmire works with, the VA cash-out reaches 100% of the appraised value including the financed fee. All of it stays subject to lender guidelines and full file review.
Three things do move your numbers:
- The appraisal. VA requires an appraisal on a cash-out, and the appraised value sets your ceiling.
- The funding fee. It is reviewable and is 2.15% on first use or 3.3% after for a cash-out. It is waived for veterans receiving compensation for a service-connected disability and the other exempt groups.
- Your own file. Credit, income and residual income. The wholesale programs start at a 580 decision score. Residual income is the controlling test, and the 41% debt-to-income figure is a guideline, not a cap.
Does a High-Cost State Change Anything?
Not the way the title assumes. “High-cost state” is not a VA concept. Conforming loan limits work by county. FHFA’s announcement of its conforming loan limits describes a baseline for most areas and a higher ceiling for high-cost areas.
For a veteran with full entitlement, there is no VA loan limit. The county limit matters only if entitlement is partial. In that case, speak with a loan officer about your numbers.
What a high-cost market does change is the building. Condos in these markets are often older, with bigger associations, special assessments and heavy insurance and reserve pressure. Those are exactly the topics a questionnaire asks about. So the questionnaire is no more strict there. It just has more chances to turn up a problem.
Larger loan amounts also mean a larger financed funding fee. Association dues count toward your monthly housing costs in the residual income test. Both are budget points, not rule changes.
Purchase, Streamline, Cash-Out: Who Needs What?
| Loan type | Project approval | Appraisal | Full underwriting |
|---|---|---|---|
| Purchase | Yes | Yes | Yes |
| Cash-out refinance | Yes | Yes | Yes |
| IRRRL (streamline) | Not the same review | No VA appraisal | Generally limited |
The IRRRL (interest rate reduction refinance loan) refinances an existing VA loan with no VA appraisal. A cash-out is a different loan. It always needs the appraisal and full credit review. If you hope to take cash through a streamline, plan for the cash-out instead.
What Happens If the Building Fails?
Your next step depends on the project’s status.
| Project status | What it means | Your next step |
|---|---|---|
| Listed and active | The project is VA-eligible | Proceed to appraisal and underwriting |
| Accepted with conditions | Items must be cleared | The lender works with the HOA on the conditions |
| Not listed | No current VA approval | The lender may submit a package to VA, which adds time |
| Rejected | The project cannot carry a VA loan | Explore another loan type |
For an unlisted project, the lender sends a written request and the association’s organizing documents to VA. Typical items are the declaration, bylaws, budget, financials, insurance and a litigation statement. Initial review can take a while, so start the HOA request early.
A slow or uncooperative HOA is the common failure point on refinances. Association fees for the questionnaire vary, and they are usually a closing cost you can see on your Loan Estimate. Ask the lender who is requesting what, and when.
A Worked Example
Picture a veteran with a 2.15% first-use funding fee who owns a condo in a high-cost metro. The building was approved when she bought. She applies for a cash-out to reach 100% of the appraised value.
The lender checks the VA list and finds the project “accepted with conditions.” The questionnaire goes to the HOA, which reports a pending lawsuit and a recent special assessment. The lender asks VA-facing questions about both.
The appraisal comes back at a value that sets her ceiling. Her residual income is fine. But the guaranty depends on the project, not on her. If the conditions clear, the cash-out proceeds on normal terms. If not, she needs a different path.
The questionnaire never changed her loan terms. It decided whether the loan could exist.
Questionnaire Red Flags for a Cash-Out
| Topic | Why it matters | Fixable? |
|---|---|---|
| Pending litigation | Can stall project review | Sometimes, if resolved |
| Delinquent dues | Signals weak association finances | Sometimes, over time |
| Low reserves or weak insurance | Raises project risk | Often with HOA action |
| Heavy investor ownership | Hurts occupancy mix | Rarely quickly |
| Problem governing-document clauses | Can block approval | Usually only by amendment |
Financial and paperwork issues are often fixable. Structural issues, like the ownership mix, usually are not. A lender can tell you which side of that line your building is on.
Key Terms Defined
Questionnaire: A lender and HOA document that asks about the condo project’s finances, occupancy and legal matters.
Project approval: VA’s acceptance of a whole condo building or community as eligible for VA loans.
Reasonable value: The value VA’s appraiser sets, which caps a cash-out at 100%. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Net tangible benefit: A test showing the refinance actually helps you. The lender must give you required comparison disclosures. VA’s cash-out quick reference says a guaranty is not allowed if the compliance disclosures are not uploaded.
Entitlement: The VA benefit that backs your loan. Full entitlement means no VA loan limit.
Next Steps
- Ask your lender to check the VA list for your building now.
- Ask the HOA for the questionnaire and documents early.
- Confirm your entitlement with your certificate of eligibility.
- Budget for dues and the financed funding fee.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
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. See also Lendmire’s piece Can You Refinance a VA Cash-Out Later in a High-Cost Closing State?.
Frequently Asked Questions
Is the condo questionnaire a VA form?
No. It is a lender and HOA document. VA’s own requirements live in its Lenders Handbook and regulations. The questionnaire simply helps the lender confirm the project is acceptable.
Can VA approve just my unit?
VA’s handbook describes project-level approval for condominiums. Some websites claim single-unit approval exists, but they conflict with the handbook. Ask your lender to confirm the current VA position.
Does a VA cash-out need the same condo approval as a purchase?
Yes, the project must be VA-eligible, and a cash-out also requires a VA appraisal and full underwriting. A streamline works differently and has no VA appraisal.
Do PUDs and townhomes need project approval?
PUDs do not need VA project approval, though title and lien rules still apply. Condominiums do.
Does living in a high-cost state raise my VA cash-out amount?
No. The cap is 100% of reasonable value, and with full entitlement there is no VA loan limit. County limits matter only with partial entitlement.
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 Lenders Handbook, Chapter 16
2. VA Lenders Handbook, Chapter 3
3. Federal Register, cash-out rulemaking (38 CFR 36.4306)
4. FHFA conforming loan limits announcement
5. VA cash-out quick reference
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: Does a 2-4 Unit Primary Home Qualify for a VA Cash-Out With High DTI? · Can a Veteran Get a VA Cash-Out in an Irrevocable Trust? · VA Cash-Out Appraisal Requirements for a Condo
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.