The Quick Read: Partial entitlement does not block a VA cash-out. It limits how much VA guaranty sits behind the new loan, and that can shrink the amount a lender will place at 100% of value. Restored entitlement removes most of that limit. Which one you have depends on what happened to your earlier VA loan and whether the home is still yours.
Key Takeaways
- A VA cash-out can reach 100% of the appraised value, financed funding fee included.
- With full entitlement, there is no VA loan limit. With partial entitlement, the remaining guaranty is what constrains the loan.
- Entitlement tied to the loan you are paying off can be restored for that refinance. Entitlement tied to a different VA-financed home stays charged.
- Every cash-out must pass a net tangible benefit test, and a VA-to-VA payoff must meet seasoning.
- Residual income, not a credit-score cutoff from VA, controls the approval.
What “Partial” and “Restored” Actually Mean
Entitlement is the guaranty VA gives a lender on your loan. Use it on one home and part of it is committed. Pay that loan off and the entitlement can come back. Until then, you have partial entitlement.
Here is the plain version of the math. Remaining entitlement is 25% of the county loan limit, minus the entitlement you already used and have not had restored. VA Circular 26-25-10 says the conforming loan limit becomes part of that formula for a veteran with partial entitlement seeking a loan above $144,000. The same circular notes the entitlement statute uses the one-unit limit, even when the property has more than one unit.
Full entitlement is different. No VA loan limit applies, and the wholesale programs Lendmire places VA loans with serve amounts up to $4,000,000 with full entitlement. Restored entitlement puts you back in that position, provided nothing else is still charged against your certificate of eligibility (COE).
The VA sets the entitlement. A lender cannot invent it, and a broker cannot override it. Your COE shows what you have used.
How Much Cash Can You Actually Take Out?
The ceiling is 100% of the appraised value. That includes the financed funding fee. Under 38 U.S.C. §3709, the statute allows up to 100% of value on a cash-out, which replaced the old 90% limit. Some lenders still set lower caps of their own, and 90% survives in a few spots, including one of the net tangible benefit criteria.
So where does partial entitlement bite? The guaranty behind the loan. A VA loan above the guaranty-supported amount may need a down payment on a purchase. On a refinance, a shortfall rarely shows up as a check at closing. It shows up as a smaller loan, which means less cash out.
For a borrower in that spot, the exact figure depends on the county and the unrestored entitlement on file. This is a conversation for a loan officer reviewing your COE, not a number to guess at from an article. If you are working through the numbers, Lendmire’s piece How Much a VA Cash-Out Releases on Restored or Partial Entitlement walks through the mechanics further.
Same Home Versus a Different Home
This is the line most explainers miss. It changes the answer.
| Situation | Entitlement effect | Cash-out effect |
|---|---|---|
| Paying off a VA loan on this same home | Entitlement used on that loan can be restored for the refinance | Often reads like full entitlement |
| VA loan still active on a different home | That entitlement stays charged | Guaranty is partial; loan size may be limited |
| Paying off a non-VA loan on this home | No VA entitlement tied to the payoff | Depends on what remains on your COE |
| Prior VA loan repaid, home kept, restoration not requested | Entitlement may still show as used | Request restoration first |
VA Circular 26-19-30 gives a worked example. A veteran refinances a VA loan that used $80,000 of entitlement into a $600,000 loan with no other unrestored entitlement. VA treats the $80,000 as restored for that refinance, so the maximum guaranty is $150,000, or 25% of $600,000. VA’s Exhibit A also includes a partial-entitlement scenario, and that is the one to model if another VA home is still outstanding.
The second half of the rule follows from the “used and not restored” language. If you bought a second home with VA and still own it, that entitlement stays committed. Paying off your first home’s loan does not release it.
The Step-by-Step Path for a Cash-Out
1. Pull your COE. It comes through a lender, VA.gov or by mail. It shows entitlement used on prior loans.
2. Identify the loan you are replacing. VA, FHA, conventional, anything. A cash-out can refinance any loan type into VA.
3. Confirm what is charged and what is restorable. Restoration requests go to the VA Eligibility Center on VA Form 26-1880.
4. Order the VA appraisal. The Notice of Value sets reasonable value. The new loan, fee included, is measured against it.
5. Pass the net tangible benefit test. The lender gives you the information by the third business day after application and again at closing. The loan has to meet at least one of eight criteria.
6. Meet seasoning if you are paying off a VA loan. That means the later of 210 days from the first payment due date or the sixth monthly payment.
7. Clear underwriting. Residual income is the controlling test.
VA Circular 26-18-30 is the source for the loan-to-value method and the net tangible benefit timing.
Across the wholesale programs Lendmire places files with, the step that trips borrowers most often is the COE, not the appraisal. A restoration that has been requested but not yet recorded can leave the COE showing entitlement as used. Sorting out the paperwork before the application keeps the file from stalling at the guaranty review.
Underwriting: What Lenders Look At
VA sets no minimum credit score. The wholesale programs Lendmire works with start at a 580 decision score. Some lenders set a higher floor of their own, which is why the same file can get different answers from different lenders.
Residual income is what decides the outcome. It is the money left each month after housing costs, debts and a set allowance for living expenses. The 41% debt-to-income figure is a guideline, not a cap. A ratio above it needs residual income well above the table. The CFPB’s handout for servicemembers notes that strong credit history, low debt, long employment and savings can work as compensating factors.
The Funding Fee and Why It Matters on a Cash-Out
The funding fee is financed into the loan, so it counts against the 100% ceiling. It reduces the cash available. Within the wholesale programs, the cash-out fee is 2.15% on first use and 3.3% on subsequent use. Veterans receiving compensation for a service-connected disability are exempt, as are the other exempt groups.
Think of it as a trade. A borrower with an exemption keeps more of the ceiling. A borrower on subsequent use gives up more of it. Check your exemption status before you decide how much cash you actually need.
Where the General Rule Breaks
A VA loan being refinanced into another VA loan. Seasoning applies. A non-VA loan being refinanced has no VA seasoning clock attached to the payoff, though the lender’s own overlays still apply.
The one-time restoration. A veteran who repaid a VA loan and kept the home can ask for restoration once. If that exception is already spent, a later cash-out has to rely on selling the property or substituting another eligible veteran. Restoration criteria are laid out in VA’s Buyer’s Guide.
Surviving spouses. Entitlement belongs to the spouse independently of the service member. A surviving spouse who was not on the original loan can do a cash-out, but not an IRRRL.
Foreclosure or short sale. Entitlement stays reduced until VA’s loss is repaid. The COE shows where you stand.
The IRRRL. It lowers the rate or moves an adjustable loan to fixed. It generally cannot put cash in your hands. Cash needs a cash-out.
State law. Some states limit cash-out lending in certain situations, such as homestead rules. Check with a loan officer who works in your state.
Occupancy. VA loans are for a home you live in. A rental or second home does not fit this program, since occupancy decides the leverage.
Restore First or Refinance First?
It depends on the sequence.
If you are paying off a VA loan on the same home, the entitlement used on that loan can be restored for the refinance itself. You often do not need a separate restoration request first.
If you repaid a VA loan with cash or a non-VA loan and kept the home, request restoration and make sure it has been recorded before the lender reviews guaranty. A mismatch between what you believe you have and what the COE shows can force a lower loan amount.
If another VA home is still outstanding, no restoration is available for it. Plan the cash-out around the guaranty you actually hold. Lendmire’s article How to Refinance Into a VA Cash-Out on Partial or Restored Entitlement covers sequencing in more detail.
After the Cash-Out: What Is Left?
The loan amount on the new loan sets the entitlement charged against your COE. A larger cash-out can leave less remaining entitlement for a later purchase. If you plan to buy again with VA, factor that in. It is one of the real costs of taking more equity out.
The VA refinance options on Lendmire page lays out how the VA cash-out refinance program fits next to the other loan types a brokerage can arrange.
Common Mistakes
- Assuming 90% still applies. VA allows up to 100% of value, though some lenders cap lower.
- Assuming any loan under 100% passes. The net tangible benefit test must also pass.
- Treating restoration as automatic. It is requested with a form and proof of payoff.
- Believing refinancing never changes entitlement. A same-home VA payoff restores that entitlement for the refinance.
- Ignoring churning warnings. The CFPB and VA have warned about offers to skip payments, promised escrow refunds and low rates quoted without terms.
Key Terms Defined
Entitlement: the amount of guaranty VA provides a lender on your loan.
Restored entitlement: guaranty that returns to you after a VA loan is repaid or substituted.
Certificate of Eligibility (COE): the VA document showing your eligibility and the entitlement you have used.
Net tangible benefit (NTB): a test showing the refinance gives you a real, measurable advantage.
Notice of Value (NOV): the appraiser’s reasonable-value determination that the loan is measured against.
Residual income: what is left each month after taxes, housing, debts and a set living allowance.
Before You Apply: A Short Checklist
- Pull your COE and read the entitlement used lines.
- Identify which loans are still active and which have been repaid.
- Confirm whether your funding fee is waived.
- Decide how much cash you need, not just how much you can reach.
- Ask the lender how it treats the 100% ceiling and whether it applies its own cap.
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.
Frequently Asked Questions
Can I do a VA cash-out if I still have another VA loan?
Yes, though your guaranty is partial. The entitlement tied to the other home stays charged, so the loan size may be limited. A loan officer reviewing your COE can tell you where that lands.
Does a cash-out use up my restored entitlement?
It charges entitlement based on the new loan amount. A larger cash-out leaves less for a later purchase. Plan for that if you expect to buy again with VA.
What if I already used the one-time restoration?
Then restoration generally requires disposing of the VA-financed property and repaying the loan. Check the COE for the current status before you apply.
Can I refinance a non-VA loan into a VA cash-out?
Yes. A VA cash-out can refinance any loan type. VA seasoning is tied to the loan being paid off, so it applies to VA-to-VA payoffs.
Is there a minimum credit score?
VA sets none. The wholesale programs Lendmire places loans with start at a 580 decision score, and some lenders set a higher floor. Approval is subject to lender guidelines and full file review, and nothing here is a commitment to lend.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and home buyers in 16 states with FHA, VA, conventional and jumbo purchase and refinance loans arranged through wholesale lenders. Lendmire is never the lender; program terms are set by the lender and the agency guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
3. VA Circular 26-19-30, Exhibit A
5. CFPB servicemember handout: VA home loans
7. CFPB/VA WARNO on refinance offers
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: VA Cash-Out COE Requirements With Partial or Restored Entitlement · How to Check Entitlement for a VA Cash-Out on an Existing VA Loan · VA Cash-Out vs Jumbo Cash-Out for a Veteran With a High-Value Home
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.