Current VA cash-out guidelines, updated from one source.
Read the block as VA’s rulebook reduced to what decides a file. The loan stops at the reasonable value, fee included; the fee follows the veteran’s use of entitlement unless an exemption applies; the loan being replaced must be seasoned; the new loan must pass a net tangible benefit test and a ratio guideline that residual income can override. The table beneath carries the fee tiers.
Of the reasonable value, funding fee included, on a principal residence
The ceiling is 100% of the reasonable value with the fee counted, and the VA appraisal sets that value. The payoff, the costs, and the fee come out of the loan first; what is left is the cash, and the whole structure carries no monthly insurance premium.
First use; 3.3% after first use; exempt with service-connected disability compensation
2.15% on first use, 3.3% on subsequent use, usually financed into the loan, and waived for veterans with service-connected disability compensation and the other exempt groups VA lists. The fee is VA’s charge for backing the loan; it replaces the monthly insurance other programs carry.
And six payments on the loan being refinanced, whichever comes later
VA will not back the new loan until the loan being refinanced is seasoned: the later of 210 days after its first payment was due and the date its sixth monthly payment was made. The rule protects veterans from refinancing the same loan again and again.
A net tangible benefit test, a debt-to-income guideline, and residual income that decides
Three tests sit on this card: a decision score of 580 or better on the wholesale programs, a debt-to-income ratio measured against the 41% guideline, and a residual-income figure measured against VA’s regional table, which is the one that decides. The net tangible benefit test is the fourth, applied to the new loan itself.
| Loan | Fee | Notes |
|---|---|---|
| Cash-out refinance, first use of entitlement | 2.15% | May be financed into the loan; the total may not exceed the cap |
| Cash-out refinance, subsequent use | 3.3% | Any prior VA loan counts as a prior use, including an IRRRL |
| Exempt borrowers | 0% | receiving VA compensation for a service-connected disability; eligible to receive VA compensation for a service-connected disability but receiving retirement or active-duty pay instead; surviving spouses receiving Dependency and Indemnity Compensation (DIC) |
| Rate-reduction refinance loan (IRRRL), for comparison | 0.5% | An existing VA loan refinanced for a lower rate or a fixed rate; no cash out; no appraisal required by VA |
The line-of-credit alternative: Lendmire’s HELOC program lends to 90% combined loan-to-value on a primary residence while the existing first mortgage stays in place and carries no funding fee. A conventional cash-out reaches eighty percent of value, and one wholesale lane goes higher; FHA cash-out reaches eighty percent with mortgage insurance. Each is compared on the same numbers before a recommendation.
Current VA cash-out snapshot · updated October 1, 2026 · the new loan is sized on the reasonable value with the funding fee financed inside the cap · county figures bear only on remaining entitlement and are confirmed by a Lendmire loan officer · taking cash out raises the balance and may extend the payoff · Lendmire is a broker, never the lender.
Read every figure on this page as a program parameter and nothing more: the leverage on the reasonable value, the funding fee by use of entitlement and the exemptions, the seasoning thresholds, the net-tangible-benefit test, the wholesale credit floor, and the ratio guideline come from Lendmire’s guideline source on the date shown and are subject to change and to underwriting. Calculator payments are estimates on a published benchmark rate. Lendmire LLC, NMLS #2371349, broker, not lender, not a government agency. Not legal or tax advice.
What a VA cash-out refinance is — and how the file is qualified.
Below, the VA cash-out in four parts: the loan itself and where the cash comes from; the entitlement, the Certificate of Eligibility, and the funding fee; the seasoning clock, the net tangible benefit, and the VA appraisal; and the moment the streamline refinance or a line of credit serves a Tennessee veteran better.
For the program overview, see Lendmire’s VA cash-out refinance program; the rules are VA’s, at VA.gov, and the Certificate of Eligibility is requested there.
One new VA loan, cash at closing
VA calls it a cash-out whenever the new loan does more than refinance the existing VA loan at a lower rate without cash, which is the streamline’s job. The cash-out can replace a conventional loan, an FHA loan, or a VA loan, and the proceeds are the veteran’s to use once the old liens and the costs are retired on the Tennessee home.
Entitlement, the COE, and the funding fee
The funding fee is how VA pays for its guaranty: a share of the loan on first use, a larger share on a later use, financed inside the cap in nearly every file, and waived for veterans receiving compensation for a service-connected disability, for surviving spouses receiving dependency compensation, and for the other groups VA exempts. The COE states the exemption and the prior use.
Seasoning, the net tangible benefit, and the appraisal
VA’s appraiser works from comparable sales and from VA’s minimum property requirements, so the Notice of Value is a value and a condition finding together. A Tennessee home with a safety or structural defect is repaired before closing or the loan is not backed; a value below the plan shrinks the loan to the cap at that value.
VA cash-out or the alternatives
A veteran with an existing VA loan who wants only a lower rate or a fixed rate should look at the streamline refinance first: a smaller fee, no VA appraisal, no cash. A veteran who wants equity out needs the cash-out. A home equity line keeps the first mortgage in place and prices only the new money, which matters when the current loan carries a rate worth keeping.
Everything hangs on two inputs, the reasonable value and the current balance, with the fee tier as the third. The first sets the ceiling, the second sets what is left under it, the third decides how much of that is fee. The calculator renders all of it for a Tennessee home and prints the line-of-credit figure alongside.
Where Tennessee’s equity sits — and how VA cash-out fits.
Three statewide Census measures frame a VA cash-out in Tennessee: how many households own, what the typical home is worth, and what households earn. The city pages carry the local versions, which are the ones a single file is written against.
Statewide figures provide general market context, not an appraisal or an income calculation. A higher median value puts more equity behind full-value leverage; a higher balance against that value leaves less of it reachable. VA’s cap is fixed; the dollars it releases follow the market.
Data sources: U.S. Census Bureau — ACS 5-Year (2024) housing and population estimates, including tenure, home values, gross rents, and household income.
Where Tennessee’s veterans borrow equity — market by market.
Six Tennessee markets, six guides. VA’s program is the constant; the equity a typical home holds, the property-requirement questions the local stock raises, and the regional residual-income table are what vary.
Nashville
Nashville is one of the larger Tennessee owner markets, close to 164,334 households, about 52% of households, and in a metropolitan market that size the veterans among them refinance for cash on VA terms every month: full value, no monthly insurance, the fee financed. Census context: median value near $413,600, median household income near $77,371, population near 690K.
Memphis
Near 113,608 households own in Memphis (45% of the total), and the veterans and service members in that number carry an entitlement that reaches further than the conventional or FHA cash-out caps in this metropolitan market. Census context: median value near $169,000, median household income near $51,736, population near 619K.
Chattanooga
Chattanooga is one of the larger Tennessee owner markets, close to 41,437 households, about 52% of households, and in a metropolitan market that size the veterans among them refinance for cash on VA terms every month: full value, no monthly insurance, the fee financed. Census context: median value near $283,200, median household income near $64,523, population near 186K.
Knoxville
Knoxville is one of the larger Tennessee owner markets, close to 40,240 households, about 47% of households, and in a metropolitan market that size the veterans among them refinance for cash on VA terms every month: full value, no monthly insurance, the fee financed. Census context: median value near $239,700, median household income near $54,039, population near 195K.
Clarksville
With about 37,683 owner households, about 56% of households, Clarksville is a metropolitan market where a VA cash-out file is routine: the COE, the appraisal, the seasoning, the fee, and the residual income. Census context: median value near $263,600, median household income near $69,303, population near 176K.
Murfreesboro
Near 31,783 households own in Murfreesboro (52% of the total), and the veterans and service members in that number carry an entitlement that reaches further than the conventional or FHA cash-out caps in this metropolitan market. Census context: median value near $402,100, median household income near $80,108, population near 161K.
There are no Tennessee markets with their own VA cash-out rules. The full-value leverage, the fee tiers and exemptions, the seasoning rule, the benefit test, the credit floor, and the residual-income standard are identical everywhere in the state; county figures enter only where entitlement is partial, and a Lendmire loan officer confirms them rather than this page printing them.
Four ways Tennessee veterans put equity to work.
Use decides instrument. The purposes below are the ones a Tennessee review meets most often, each with the detail that settles whether the VA cash-out is the right tool for it.
Renovate or repair the home
A roof, a furnace, a kitchen, an addition: the proceeds pay for the work outright, with no construction loan and no draw schedule, and the payment is fixed from the first month with no monthly insurance. The VA appraiser values the Tennessee home as it stands and inspects it against VA’s property requirements, so the plan rests on today’s equity and on any item the Notice of Value flags.
Capitalize a business or an investment
Working capital drawn from a Tennessee home arrives as one disbursement after rescission and is repaid on the mortgage regardless of how the venture performs. The review reads the veteran’s personal income and credit, not the business plan, and residual income after the new payment is the figure that decides.
Fund a large expense or a reserve
Tuition, medical costs, a family event, or cash to hold in reserve: VA sets no limit on the use, and the money arrives in one sum after rescission. The first question at the review is whether a line of credit, which charges interest only on what is drawn and carries no funding fee, would serve the Tennessee household for less.
Consolidate higher-cost debt into one VA-backed payment
Retiring a stack of balances with one VA-backed loan changes two things at once for a Tennessee household: the monthly outlay falls, and the residual income VA counts rises because the retired payments are gone. The balance runs on a new full term with the fee inside it, which is the part to weigh before signing.
Estimate the cash, the fee, and the new payment on a Tennessee home before requesting a quote.
Inputs for a Tennessee home: value, balance, cash, fee tier, term, escrows, income, debts. Outputs: ceiling, cash available, total loan, fee, payment, ratio, and the line alternative. Every cap, fee rate, and ratio comes from the snapshot; the rate is a published weekly average; residual income, which no calculator measures, decides the real file.
Tennessee VA cash-out estimate
The defaults describe a typical Tennessee home, not yours; overwrite the value, the balance, the cash, and the fee tier.
Editable benchmark: 7.28% as of October 1, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a VA cash-out refinance quote.
Illustrative starting assumptions: a $285,000 home value near Tennessee’s median owner-occupied value, a $157,000 current balance, the full-value VA cap with the first-use funding fee financed, a thirty-year term at the current Freddie Mac benchmark, property taxes and insurance estimated for Tennessee (U.S. Census Bureau). 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.
Same equity, three ways to borrow it.
A Tennessee veteran can reach the same equity three ways, and the differences are structural: a VA cash-out replaces the first mortgage at full-value leverage with the fee inside; the VA streamline refinances an existing VA loan for a better rate with no cash; a home equity line sits behind the first mortgage and prices only the new money. The cards compare them.
VA cash-out, the IRRRL, or a HELOC.
A new VA-backed first mortgage replaces the old one, VA or not, up to the full reasonable value with the funding fee financed inside the cap and no monthly mortgage insurance. It is a full refinance with a VA appraisal, the seasoning and benefit tests, and a fee unless the veteran is exempt; it delivers the largest lump sum of the three.
The streamline refinances an existing VA loan to a lower rate or from an adjustable to a fixed rate: a small fee, no appraisal required by VA, limited underwriting, and no cash out. It is the right tool for the Tennessee veteran whose only goal is a better payment on a VA loan already in place. See Lendmire’s VA loan program for the IRRRL.
A line borrows only the new money. The first mortgage stays, the draw comes in stages, the payment during the draw period is often interest only, and no funding fee applies; the credit standard is the line program’s rather than VA’s. The trade is a payment that can change and two liens instead of one. See Lendmire’s home equity line of credit.
Choose the VA cash-out when equity is the goal and the full-value reach or the end of monthly insurance matters; choose the streamline when the current loan is VA and only the rate needs fixing; choose the line when the first mortgage should stay and the need is modest or staged. Where entitlement is partial, the conventional and FHA cash-outs are priced as well. Without entitlement, see the conventional and FHA cash-out programs.
What to prepare for a Tennessee scenario review.
No purchase contract, but the entitlement has to be proven and the residual income documented. A Tennessee file usually needs the items below, roughly in the order the lender asks.
This is a general preparation guide, not a universal checklist. The selected lender may request additional information based on the transaction, the property, the automated finding, and the income picture. Nothing here is legal or tax advice.
Local details that can change the loan.
VA’s program reaches far and tests carefully. These are the details that most often move a Tennessee VA cash-out between the review and the closing table.
Use these checks to keep the Tennessee file clean and fundable.
Fee, residual income, seasoning: confirm the first on the COE, compute the second on the new payment, and check the third against the current loan’s payment history for the Tennessee home.
- Confirm the fee tier: A prior VA loan, including a streamline, makes the next use a subsequent use.
- Compute the residual: Residual income after the new payment and every other obligation must meet VA’s regional table.
- Plan for the Notice of Value: The Notice of Value sets the ceiling; plan the cash on a conservative figure.
The funding fee comes out of the cash unless the veteran is exempt
Three tiers, three answers for the same Tennessee home: the first-use fee, the subsequent-use fee, and the exemption. An IRRRL in the past counts as a prior use; a disability rating in the file waives the fee entirely; a surviving spouse receiving dependency compensation is exempt as well. Confirm which applies before the cash is counted.
Residual income decides a VA file
The underwriter computes the residual on the new payment, not the old one, so a Tennessee veteran should see the figure at the review rather than at underwriting. Where the ratio exceeds the guideline, VA wants residual income at least a fifth above the table or other justification; where it does not, the table alone must be met.
The VA appraisal sets the reasonable value and checks the property
Two findings change a Tennessee file: a reasonable value under the plan, which shrinks the loan and the cash, and a property finding, which adds repairs before closing. Plan the cash on a cautious value, and walk the house for the obvious items, a bad roof, peeling paint on an older home, a missing handrail, before the appraisal is ordered.
The rescission period before the money moves
Every VA cash-out is on the veteran’s principal residence, so every one carries the federal right of rescission: a short period after signing in which the veteran may cancel, and during which nothing funds. The old loans are paid and the cash is wired only when that period ends, which a Tennessee veteran with a deadline builds into the closing date.
The current loan must be seasoned
Seasoning is proven by the current loan’s statement history: the first payment due date and the count of payments made. On a Tennessee file the lender reads both before ordering the appraisal, because a loan a month short of the clock is a loan that cannot close until the month passes.
From a Tennessee scenario review to cash at closing.
Four stages in a fixed order, review, COE and application, appraisal and underwriting, closing and funding, and the first decides whether the rest are worth starting on a Tennessee file.
Scenario review
The review settles the shape of a Tennessee file: whether the current loan is seasoned, which fee tier the COE will show, what residual income looks like after the new payment, and whether the streamline or a line would serve the purpose for less. The answer is written terms, and the appraisal waits until the plan holds.
COE, application, and automated finding
Application turns the plan into a file: the lender confirms the entitlement on the COE, records the household, the income, and the obligations VA’s residual-income table needs, and runs the automated system, which lists the conditions and tests the ratio against the guideline with the closing payoffs removed and the fee tier applied.
VA appraisal and underwriting
Value, then verification. The Notice of Value fixes the ceiling for the Tennessee home; the underwriter verifies the entitlement, the age of the current loan against the seasoning thresholds, the benefit the new loan provides, the residual income after the new payment, and the payoffs. A file reviewed on a cautious value usually passes without being resized.
Closing, rescission, and funding
Sign, wait, receive. The closing disclosure and VA’s loan comparison are signed, the settlement agent holds the package through the rescission period, and at funding the old liens are paid and released and the proceeds reach the Tennessee veteran by wire, leaving one VA-backed loan with no monthly insurance where there may have been three.
A brokerage built around equity lending.
What a veteran gets from a broker on a cash-out is a choice made honestly: the VA cash-out, the VA streamline, the home equity line, and the conventional and FHA cash-outs for partial entitlement, each priced on the same figures, with the one that serves the purpose written up and the others explained.
Every route, one review
A veteran is never pushed toward the one loan a lender offers. The cash-out, the streamline, and the line are each run on the same reasonable value, balance, and cash for the Tennessee home, each costed to open and to carry, and the one that serves the purpose at the lowest cost is the one recommended.
Placed across wholesale programs
VA sets the program; each wholesale lender layers its own overlays and its own cost on top. The Tennessee file goes to the lender where the score, the leverage, and the property fit best, and the veteran’s terms come from that placement, not from the only desk in the building.
Terms in writing, before any fee
A review closes with written terms: the loan, the fee, the cash after costs, the payment, the ratio, and the residual income, each computed on a cautious reasonable value. The Tennessee veteran reads them first; only after agreeing the plan is worth an appraisal does anything get ordered or any fee get paid.
Trusted by veterans & families alike.
Tennessee VA cash-out refinance FAQs
What a Tennessee loan officer hears about VA cash-outs, answered plainly and without the figures that belong in the snapshot and the calculator above.
What is a VA cash-out refinance, and who can use it?
Think of a refinance that pays you and is backed by VA: new note, new term, a balance that includes the cash and the financed fee, one payment with no insurance premium inside it. Principal residences only, entitlement required, and the loan being replaced can be any kind of mortgage.
How much cash can I take out with a VA refinance?
The Notice of Value fixes the ceiling, the fee tier takes its share inside it, and the cash is what remains after the balance and the closing costs. The calculator shows the Tennessee figures by tier beside the line-of-credit alternative.
How much is the VA funding fee on a cash-out, and who is exempt?
The snapshot carries the rates. The fee is VA’s charge for its guaranty and the reason a VA loan carries no monthly insurance; it is financed inside the cap, which is why the tier changes the cash available on a Tennessee home, and it is waived for the exempt groups.
How long do I need to have had my current loan before a VA cash-out?
The thresholds are in the snapshot: days since the first payment was due, and payments made, whichever comes later. Plan the Tennessee closing for the month the clock clears, and remember that the new loan must also pass a net tangible benefit test.
What credit score do I need for a VA cash-out refinance?
VA sets no minimum credit score; the wholesale programs Lendmire places files with start at the decision score in the snapshot. Above that floor the score sets the cost of the loan, and the approval turns on residual income: the money left each month after the new payment, every other obligation, and the household’s living costs, measured against VA’s table for the region and the family size. A Tennessee veteran with a modest score and strong residual income is a routine file.
What is residual income, and how does it affect my file?
The ratio is a guideline; residual income is the rule. Meeting the table approves a file the ratio alone would question, and missing it declines a file the ratio alone would pass. The review shows the Tennessee figure on the new payment with the closing payoffs removed.
Would a HELOC be better than a VA cash-out?
Decide on the current mortgage first. A line of credit leaves a good first mortgage alone, borrows only the new money, carries no funding fee, and reaches a high combined leverage, so for a modest or staged need it is usually the cheaper route, with a payment that can change and the line program’s own credit standard as the trade. When the first mortgage should go, the sum is large, or the full-value reach only VA offers is needed, the VA cash-out fits. Both are arranged here and priced side by side on your Tennessee figures.
How do I get my Certificate of Eligibility, and what does it show?
The COE is VA’s statement of what the veteran has earned: full or partial entitlement, prior use, and exemption from the fee. A Tennessee veteran who has it before the review saves the delay that chasing service records later adds.
Does the home have to be my primary residence?
VA’s occupancy rule is strict for a cash-out: the veteran, or a spouse under the deployment exception, must occupy the Tennessee home as a principal residence. Investment property and vacation homes take the conventional route.
Can I use a VA cash-out to replace a conventional or FHA loan?
A veteran who bought with FHA or conventional financing and never used the entitlement can convert the loan to VA through the cash-out, drop the insurance premium, and take cash. The streamline cannot do this; it refinances only an existing VA loan.
A Tennessee VA cash-out sized to the value, the balance, and the fee.
Enter your Tennessee figures above, then ask for a review; the cap, the fee tier, the seasoning, the benefit test, and the residual income are checked against VA’s rules and the wholesale overlays, and what comes back is a written set of terms, not an estimate.
This guide covers Tennessee — for the program overview, see Lendmire’s VA cash-out refinance program.
All Tennessee city guides (6): Chattanooga · Clarksville · Knoxville · Memphis · Murfreesboro · Nashville
Related programs: Cash-Out Refinance · VA Loans · HELOC