The Quick Read: A VA cash-out releases the appraised value, up to a 100% ceiling, minus what has to be paid off and the fees. A spouse who is not on the loan does not change that ceiling. What a spouse can change is the qualifying test, because in some states the spouse’s monthly debts count against the household budget even when the spouse is not a borrower. Whether that happens depends on the state, and the lender’s own overlays can add to it.
Most people ask this as a dollar question. VA never sets a dollar amount. Two things set it: a ceiling tied to value, and a qualifying test built on the household’s monthly obligations. The spouse touches the second one.
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.
How Is the Cash Amount Actually Figured?
The cash comes from a simple subtraction. Start with the ceiling, take out the payoff of the current mortgage and any other liens being cleared, then take out fees. What is left is cash in hand.
The ceiling comes from federal rule. Under 38 CFR 36.4306, the new loan cannot exceed 100 percent of the reasonable value of the home as VA determines it. Across the wholesale programs Lendmire places VA files with, the cash-out reaches 100% of the appraised value, and that figure includes the financed funding fee. There is no mortgage insurance on top, and no VA loan limit when the borrower has full entitlement. Program figures are subject to lender guidelines and full file review.
Three things trip people up here:
- The fee sits inside the ceiling. If the funding fee is financed, it uses part of the 100%.
- Payoffs come first. A borrower with a large balance has less cash than the equity number suggests.
- The appraisal sets the value. The lender orders it, and the borrower does not pick the appraiser. VA describes this on its cash-out refinance page.
Taking the full 100% leaves no cushion in the home. That is a budgeting point, not a rule. Some lenders set a lower ceiling than VA allows, so the number you see from one lender may not match another’s.
What Does the Funding Fee Take Out?
The funding fee is a percentage of the loan, so a larger loan carries a larger fee. For a VA cash-out refinance the fee is 2.15% on first use and 3.3% on later use, per a VA program notice 26-23-06, Exhibit B. Veterans who receive compensation for a service-connected disability, and the other exempt groups, do not pay it.
The fee can be financed. That keeps cash out of pocket at closing but reduces the cash released, since the fee counts toward the 100% ceiling. The exhibit is an older document, so a loan officer should confirm the current chart on your file. The Loan Estimate and Closing Disclosure show the actual figures.
Does a Non-Borrowing Spouse Change the Cash Amount?
Not directly. The ceiling is based on the home’s value, and the spouse’s name on or off the note does not move it. The spouse changes whether the loan is reviewed and how large a loan the household budget supports.
Here is the plumbing. Residual income is the controlling VA test. It measures what is left each month after taxes, debts and household costs. The 41% debt-to-income figure is a guideline, not a cap. A ratio above it needs residual income well above the table.
A spouse’s debts matter because they can shrink that residual income. Say a veteran applies alone, but the spouse carries an auto loan and student loans. Where VA counts those debts, residual income drops and the ratio rises, even though the spouse never signs the note. A smaller loan amount may be the result, not because the ceiling moved, but because the household can’t carry more.
When Do the Spouse’s Debts Count?
It turns on the state. VA’s Lenders Handbook, Chapter 4 sets the rule in two parts.
| Factor | Non-community-property state | Community-property state |
|---|---|---|
| Veteran applies alone | Allowed | Allowed |
| Spouse’s debts | Not considered | Must be considered |
| Spouse credit report | Not needed | Pulled to identify liabilities |
| Spouse credit history | Not a factor | Need not drive the decision |
In a non-community-property state, a married veteran can take the loan in their own name “without regard to the spouse’s debts and obligations.” In a community-property state, the spouse’s debts and obligations must be considered even if the veteran wants the loan in their name only.
VA’s handbook says the non-purchasing spouse’s credit history does not need to be considered, but the spouse’s liabilities must be, to see the extent of household liabilities. A veteran with satisfactory credit can still be a satisfactory risk even when the spouse’s credit is poor. Individual lenders may be stricter than VA, so overlays vary.
Which states count as community-property states is worth confirming with your loan officer for your property’s location, since the rule turns on where the borrower lives or the property sits.
How Is a Cash-Out Underwritten, Step by Step?
On a married-veteran file, the sequence runs like this.
1. Eligibility. The veteran or service member gets a Certificate of Eligibility (COE). VA’s COE decides eligibility, and service requirements are VA’s rules. The lender, VA.gov or mail can supply it, per the VA home loans page.
2. Spouse status at application. The lender asks about marital status and where the property is. That answer decides whether the spouse’s liabilities enter the file.
3. Credit pull. In a non-community-property state the veteran’s file stands alone. In a community-property state the lender also pulls the spouse’s report, mainly to identify debts.
4. Loan Analysis. The lender adds the spouse’s monthly debt payments on VA Form 26-6393. If the lender decides a spouse obligation should be left out, it must document that on the form with an explanation.
5. Residual income. Household size counts for the residual income table. Per VA lender-training guidance, a non-purchasing spouse may be left out of the count with documentation that the spouse is self-supporting. That is training material, not a regulation, and exclusion is not promised.
6. Appraisal. Reasonable value sets the 100% ceiling.
7. Net tangible benefit and seasoning. Every VA cash-out has to show a net tangible benefit, which is one of VA’s eight listed benefits. VA Circular 26-19-05 describes the tests. The half-percent rate-reduction and fee-recoupment tests belong to the IRRRL, never the cash-out. Seasoning applies, and it matters most on VA-to-VA loans.
8. Payoffs, fees and closing. The payoff and fees come out of the ceiling, and the spouse signs only what the lien requires.
Cash-out also has to be a first lien, the veteran has to own the home, and the borrower must live in it. Available entitlement matters too. If a VA loan on the same property is being paid off, entitlement can be restored, per Chapter 6 of the Lenders Handbook.
Key Terms Defined
Non-borrowing spouse: A married partner who is not on the loan and does not sign the note.
Non-purchasing spouse (NPS): VA’s term for the same person. VA looks at this person’s debts in some states.
Residual income: The money left each month after taxes, debts and household costs, which VA treats as the controlling test.
Community-property state: A state where spouses jointly own most property acquired in the marriage, which changes how VA treats the spouse’s debts.
Net tangible benefit: A VA requirement that the cash-out must benefit the borrower in a way VA lists.
Type I and Type II cash-out: VA’s two labels, based on whether the new loan exceeds the payoff of the loan being refinanced.
Does the Spouse Have to Sign Anything?
Possibly, but not the note. Federal Regulation B bars a lender from requiring a spouse’s signature on a credit instrument when the applicant qualifies alone. A lender can still require the spouse to sign what is needed to create a valid lien on the home. The Federal Reserve’s background on Regulation B draws the same line between a lien signature and a note signature.
In practice, title and state law decide what the spouse signs. If the veteran relies on the spouse’s income, the lender may ask for the spouse’s signature to make that income available. A spouse who signs a lien document is not agreeing to repay the loan. Check with the title company and a family-law attorney if the home was bought before the marriage or if title is unusual.
Where the General Rule Breaks
The tidy version above has edges. These are the ones that come up on files.
Excluding a spouse debt. The lender must document why it leaves out an obligation. The documentation standard is in the handbook, and it is tough to meet. Do not assume a debt will be dropped.
Adding the spouse as co-borrower. Their income can then be used, which may help residual income and ratios. Their credit and debts then come in fully too. It is a tradeoff, and it depends on the spouse’s profile.
Divorce. A cash-out is sometimes the tool that buys out a former spouse’s equity share. The buyout reduces the cash left for the veteran, since it is paid out of the proceeds. A civilian ex-spouse who keeps the home is a separate problem, because the veteran’s entitlement can stay tied up. A family-law attorney should be involved before the loan application.
State limits. Some states limit cash-out refinances by state law, which can sit below VA’s federal ceiling. Check with a loan officer for your state.
Occupancy. The borrower must live in the home. VA does allow a loan for the home of a spouse or dependent when an active-duty member cannot live there.
Other programs. An IRRRL does not release cash. In community-property states, single-family programs that treat non-purchasing spouses in a similar way count their obligations, but credit history alone does not deny the loan.
Two Households, Side by Side
Say a veteran owns a home with a large equity cushion. The spouse is not on title or the note, carries a car payment, and lives in a non-community-property state. The veteran is reviewed on their own debts and income. The cash released is the ceiling minus the payoff and the fee.
Now put the same veteran and spouse in a community-property state. The ceiling is identical. The lender pulls the spouse’s report, adds the car payment and any other monthly obligations to the Loan Analysis, and runs residual income again. If the household still clears the table, the cash released is the same figure. If it falls short, the loan amount may be smaller, or the file may need a co-borrower, a debt paid off or documentation. The spouse’s credit score alone is not the issue. The monthly obligations are.
These are illustrations, not quotes. No dollar figures are shown because the real numbers depend on the appraisal, the payoff and the file.
Common Misconceptions
1. “Leaving my spouse off the loan keeps their debts out.” Not in a community-property state. VA requires those obligations to be considered.
2. “My spouse’s bad credit will deny the loan.” VA says a veteran with satisfactory credit may still be a satisfactory risk. Some lenders add their own stricter rules.
3. “The spouse must sign the note.” Regulation B restricts requiring that when the applicant qualifies alone. A lien signature is a different matter.
4. “VA lets me borrow 100%, so I get 100% in cash.” The ceiling is 100% of reasonable value, including the financed fee, and payoffs come out first.
5. “The spouse rule is the lender’s choice.” The base rule is VA’s. Lenders can add stricter overlays on top.
A Pre-Application Checklist for Married Veterans
- Confirm the state where you live and where the property sits.
- Gather a list of the spouse’s monthly debts, whether or not they are on the loan.
- Pull the COE and check available entitlement.
- Know the current payoff, including any second liens.
- Decide whether co-borrowing helps or hurts.
- Ask a title company what the spouse will need to sign.
- Talk to a family-law attorney first if a divorce or buyout is involved.
For the full program picture, see Lendmire’s VA cash-out refinance program page.
Frequently Asked Questions
Can a married veteran do a VA cash-out without the spouse on the loan?
Yes. A veteran can generally apply alone and be judged on their own debts and income. In a community-property state, the spouse’s debts and obligations must still be considered, even though the spouse is not a borrower. Lender overlays can add conditions, and all of it is subject to full file review.
Does the spouse’s income count if they are not on the loan?
Generally no, since income counts when the spouse is a borrower. If the veteran relies on the spouse’s income, the lender may ask for the spouse’s signature, but that is a lender condition and not a promise. That is why co-borrowing can help when the spouse earns well. The spouse’s debts can still count against residual income in some states, so the two sides do not offset each other automatically.
Is a credit pull on the spouse required?
In a community-property state, yes, mainly to identify the spouse’s liabilities. VA says the spouse’s credit history does not need to drive the decision. The federal delinquent-debt check, CAIVRS, is not required for a non-purchasing spouse in those states.
Does the spouse have to sign closing documents?
Possibly the lien documents, but not the note when the veteran qualifies alone. Title and state law decide what is needed, and the lender can require the signature to create a valid security interest.
Can the spouse be left out of the household count for residual income?
VA lender-training guidance says a non-purchasing spouse may be excluded from the count with documentation that the spouse is self-supporting. It is not a promise, and the lender decides based on the file.
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 your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) licensed for consumer mortgage lending in 16 states, arranging FHA, VA, conventional and jumbo purchase and refinance loans through a wholesale lending network. Eligibility is determined by the lender on each file. 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
2. VA
3. VA Circular 26-23-06, Exhibit B
4. VA Lenders Handbook Chapter 4, Credit Underwriting
7. VA Lenders Handbook Chapter 6, Refinancing Loans
8. CFPB Regulation B, 12 CFR 1002.7
9. Federal Reserve Reg B background
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: How to Qualify and Apply for a VA Cash-Out Refinance When Borrowing at a High LTV · VA Cash-Out vs Jumbo Cash-Out to Buy Out an Ex Who Is on Title · How Much a VA Appraisal Value Caps a Cash-Out Loan
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.