The Quick Read: The VA cash-out reaches further than a conventional cash-out, up to 100% of the home’s appraised value, and carries no monthly mortgage insurance. It is built for veterans and service members with a Certificate of Eligibility who live in the home. Conventional cash-out stops at a lower ceiling but has no service requirement and no VA funding fee. Which one fits depends on how much equity you need, whether you are eligible, and how much cushion you want left in the house.
The VA loan is for the eligible veteran who needs maximum access to equity, or who wants to move out of a non-VA loan. Conventional is for the borrower who has no VA eligibility, or who wants to keep the cash-out modest and the equity cushion thick. Both are real tools. Neither is a bargain just because the ceiling is higher or lower.
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.
Lendmire is a mortgage broker. It arranges these loans through wholesale lenders in the 16 states where it does consumer lending. Every program figure below is subject to lender guidelines and full file review, and none of it is a commitment to lend.
Side-by-Side
The table shows how the two programs compare on a primary home. Pricing is left out on purpose, because it depends on your file and your lender.
| Factor | VA Cash-Out | Conventional Cash-Out |
|---|---|---|
| Maximum leverage | Up to 100% of appraised value | 80% on a 1-unit primary home |
| Two-to-four unit home | Occupancy rules still apply | 75% on 2-4 unit primary |
| Monthly mortgage insurance | None | Generally above 80% LTV |
| One-time fee | VA funding fee, unless exempt | None comparable |
| Credit floor (our wholesale lenders) | 580 decision score | Set by lender and underwriting |
| Occupancy | Must live in the home | Primary residence for these caps |
| Eligibility | Certificate of Eligibility required | Credit, ratios, ownership, seasoning |
| Key income test | Residual income | Debt-to-income, reserves in some cases |
| Refinances non-VA loans | Yes | Yes |
A few notes on that table. The conventional figures come from the Fannie Mae Eligibility Matrix, which shows 80% for a 1-unit principal residence and 75% for a 2-4 unit one. Fannie Mae updates that document, so confirm the current version with your loan officer. The VA ceiling and the 580 floor come from the programs Lendmire places files with.
What “Maximum LTV” Means Here
Loan-to-value, or LTV, is your new loan balance divided by the home’s appraised value. A 100% LTV means the new loan equals the whole appraised value. An 80% LTV means you keep at least 20% equity. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
The ceiling caps the total new loan. It does not equal the cash you receive. Your payoff, any financed closing costs, and any financed VA funding fee all come out of that same capped amount. Cash in your pocket is whatever is left.
That is why two borrowers with the same home can walk away with very different checks. The ceiling sets the box. Your existing balance and costs fill part of it first.
When the VA Cash-Out Is the Better Fit
The VA cash-out wins when eligibility is in hand and you need the reach. Consider these situations.
You need more equity than 80% allows. Take a home appraised at a value where your current balance sits around 70% of it. A conventional cash-out has little room before the 80% cap. The VA cash-out can go to 100% of the appraised value, including the financed fee. That gap is the whole reason this comparison exists.
You want to avoid monthly mortgage insurance. The VA’s cash-out refinance page says the program does not require monthly mortgage insurance. A conventional loan above 80% LTV generally carries private mortgage insurance, or PMI. Conventional cash-out stops at 80%, so PMI is generally not part of that comparison, while the VA cash-out reaches higher leverage without monthly mortgage insurance.
You are in a non-VA loan and want to switch. A VA cash-out can pay off an FHA, USDA, or conventional loan and put you into a VA-backed loan. The CFPB’s VA home loan handout describes this option. It can be a clean exit if your current loan carries mortgage insurance.
Your credit is thinner or your debt ratio runs high. The VA sets no minimum credit score. The wholesale programs Lendmire places VA loans with start at a 580 decision score, and lenders may set their own floors. The VA’s controlling test is residual income, meaning the money left each month after your obligations and living costs. The 41% debt-to-income figure is a guideline, not a hard cap. A higher ratio needs residual income well above the table.
If you want the program mechanics in one place, Lendmire’s VA cash-out refinance program page walks through them.
The costs that come with the reach
The VA funding fee is a one-time charge that can be financed into the loan. For a cash-out refinance it is 2.15% on first use and 3.3% on subsequent use. Veterans receiving compensation for a service-connected disability, and certain other exempt groups, do not pay it.
Because the fee counts toward the 100% ceiling when financed, it trims the cash available at the top. That is a mechanic, not a price quote. Your Loan Estimate shows the real numbers.
The net tangible benefit test
Every VA cash-out must pass a net tangible benefit test. The lender must show how you benefit from the refinance, and the VA Lenders Handbook, Chapter 6 lists the accepted benefits. One of them is a new LTV of 90% or less of reasonable value. Taking the loan to 100% means you would satisfy a different listed benefit instead. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
This is where people get confused. The half-percent rate-reduction and fee-recoupment tests belong to the streamlined IRRRL, a separate program. They do not apply to the VA cash-out.
When the Conventional Cash-Out Is the Better Fit
Conventional wins when you are not VA-eligible, or when you would rather not borrow to the limit.
You have no Certificate of Eligibility. That settles it. The VA says you must meet credit, income, and occupancy requirements from both the VA and the lender, and eligibility starts with the COE. Without one, conventional is your path.
You want a thicker equity cushion. At 80% on a 1-unit home, you keep at least 20% equity after closing. That matters if prices dip or you sell within a few years. At 100% you keep almost none, and a modest drop in value could leave you owing more than the house is worth. A conventional cap works as a built-in guardrail.
You want to skip the funding fee. Conventional cash-out has no VA funding fee. It has its own costs, which show up on the Loan Estimate, so compare the full terms rather than one line.
Your exemption does not apply and you would pay the 3.3% tier. A veteran on subsequent use, without a disability exemption, faces the highest funding-fee tier on a cash-out. If you only need modest cash and have plenty of equity, conventional may cost less overall. This one is a genuine toss-up that depends on your numbers.
You are cashing out soon after buying. Fannie Mae’s Selling Guide on cash-out transactions covers a delayed financing exception for recent cash buyers within six months of purchase. The new loan is capped at the documented initial investment plus certain costs. It remains a cash-out loan with cash-out pricing.
Conventional trade-offs to know
The 80% cap drops to 75% on a 2-4 unit primary home. Reserves can apply on cash-out loans when debt-to-income runs above 45% on automated underwriting. Some state laws also limit cash-out leverage, so a borrower in a state with its own cap may see a lower ceiling than the national matrix shows.
Do not mix up cash-out with limited cash-out, also called rate-and-term. The matrix allows much higher leverage on a limited cash-out refinance, but that product does not give you spendable equity beyond small amounts. It is a different tool.
Rule or Lender Overlay?
Many pages quote different VA ceilings, and the disagreement is mostly about overlays. A program rule comes from the VA. An overlay is a stricter limit a lender adds on top.
Here is the practical picture. The VA’s own ceiling is 100% of appraised value. The 90% number shows up in the Handbook as one net tangible benefit option and in a narrow case involving a fixed-rate loan moving to an adjustable one with more than one discount point. Some lenders set 90% as their own cap. The programs Lendmire places files with reach 100%, though not every lender does, so ask any lender you talk to which ceiling it uses.
The same caution runs the other way. The 97% figure you may see for conventional belongs to limited cash-out, not cash-out. For a 1-unit primary home, the cash-out cap is 80%.
The Risk of Maxing Out
Taking either loan to its ceiling resets your term and raises your balance. Your home secures the debt, and missed payments put it at risk.
At very high leverage, three things deserve a hard look:
- Appraisal gaps. If the home appraises lower than expected, the ceiling shrinks and so does your cash.
- Falling values. With little equity left, a price dip can put you underwater.
- Selling costs. Agent fees and closing costs come out of your equity. With a thin cushion, you may have to bring money to the table to sell.
None of this means 100% is wrong. It means the cash should have a job that pays for itself, like retiring higher-cost debt or funding a project that adds value. Pulling equity for spending you will not recover is a different decision.
Using Your VA Benefit Now
A VA cash-out uses your entitlement. If you hope to buy another home with a VA loan later, ask your loan officer how this refinance affects the entitlement you have left. With full entitlement there is no VA loan limit. With remaining entitlement, a down payment may apply, and that is a conversation for a loan officer rather than a rule of thumb.
If you already have a VA loan, seasoning applies. The VA cash-out carries the same seasoning as the IRRRL, meaning the later of 210 days from your first payment and your sixth payment. Paying off a non-VA loan is treated differently, so your loan officer can confirm how it applies to you.
A Balanced Verdict
Pick the VA cash-out if you are eligible and you need the equity above what conventional allows, want no monthly mortgage insurance, or are leaving a non-VA loan. Accept the funding fee as the cost of that reach, and check whether you are exempt.
Pick conventional if you are not eligible, if you want to keep a larger equity cushion, or if your funding-fee tier would be the highest and your cash need is small.
A useful test: run both against the actual cash you need, not the maximum you could take. If conventional covers your goal at 80%, the extra 20 points of VA reach buys you risk you did not need. If it falls short, the VA program may be the only way to get there.
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. A loan officer can review your appraisal range, balance, and eligibility and show both paths side by side on a Loan Estimate.
Key Terms Defined
Loan-to-value (LTV): Your loan balance divided by the home’s appraised value, shown as a percentage.
Certificate of Eligibility (COE): The VA document that confirms you qualify for a VA-backed loan.
Residual income: The money left each month after taxes, debts, and basic living costs, which the VA uses as its controlling test.
Net tangible benefit: The VA requirement that a cash-out refinance must leave you measurably better off in a way the VA lists.
Overlay: A stricter rule a lender adds on top of what the program itself requires.
Funding fee: The one-time VA charge that can be financed into the loan and is waived for exempt borrowers.
Frequently Asked Questions
Can a VA cash-out really go to 100% of my home’s value?
Yes, the VA’s ceiling is 100% of appraised value, and a financed funding fee counts toward that figure. Not every lender offers the full amount, since some set a lower cap of their own. The wholesale programs Lendmire places VA files with reach 100%, subject to lender guidelines and full file review.
What is the most I can borrow on a conventional cash-out for my primary home?
On a 1-unit primary residence, the Fannie Mae matrix shows 80%. For a 2-4 unit primary residence it shows 75%. The much higher 97% figure belongs to limited cash-out refinances, which are a different product. Confirm the current matrix with your loan officer.
Do I pay mortgage insurance on a VA cash-out?
No, the VA program does not require monthly mortgage insurance. You may owe the one-time VA funding fee unless you are exempt. On a conventional loan above 80% LTV, private mortgage insurance generally applies, and the CFPB explains how it can be cancelled at 80% and ends automatically at 78% of original value.
Can I use a VA cash-out if my current loan is not a VA loan?
Yes. A VA cash-out can refinance a conventional, FHA, or USDA loan into a VA-backed loan. You still need a Certificate of Eligibility and must live in the home you are refinancing.
Does a VA streamline give me cash?
No. The IRRRL is a separate program for an existing VA loan, aimed at a lower rate or a switch from adjustable to fixed. It carries a 0.5% fee unless you are exempt. If you want cash from your equity, the VA cash-out is the program built for that.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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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. Fannie Mae Eligibility Matrix
2. VA: Cash-out refinance loan
3. CFPB: VA home loans handout
4. VA Lenders Handbook, Chapter 6 (VAP 26-7) on KnowVA
5. Fannie Mae Selling Guide B2-1.3-03, Cash-Out Refinance Transactions
6. CFPB: When Can I Remove Private Mortgage Insurance PMI from My Loan
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: Best VA Cash-Out Refinance Program Within a Year of Buying the Home · VA Cash-Out Refinance vs Conventional Cash-Out After a Divorce With a Refinance Deadline · VA Cash-Out Refinance vs Conventional Cash-Out for Retired Military Using VA Entitlement
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.