Two programs, one search box
Quick answer: No. A VA streamline refinance cannot cash out equity. Federal regulation caps an IRRRL at three things: the balance you owe, authorized closing costs, and a discount of up to 2 percent. That formula leaves no room for money in your pocket. So if you want equity, you need VA's other program. The VA cash-out refinance reaches equity, and VA splits it into a Type I and a Type II form.
The phrase "VA streamline refinance cash out" describes two loans that federal law keeps apart on purpose. One is the Interest Rate Reduction Refinancing Loan, the fast VA-to-VA refinance most people call the streamline. The other is the VA cash-out refinance, a fully underwritten loan with an appraisal. Moreover their rules sit in two separate sections of the Code of Federal Regulations. Those two sections answer the equity question in opposite directions. This guide reads both in plain English. It covers what an IRRRL can absorb, how VA sorts cash-out loans into Type I and Type II, and how far a cash-out reaches into your home's value. It also walks the eight ways to pass the net tangible benefit test. Finally, it works the seasoning clock on a calendar. For the streamline's own recoupment arithmetic, our VA IRRRL guide runs that math in full.
Key takeaways
- The streamline cannot return cash. Under 38 CFR 36.4307(a)(4)(i), an IRRRL stops at your balance, closing costs authorized by 38 CFR 36.4313(d), and a discount of up to 2 percent of the loan amount.
- The cash-out program is the one that pays out. It runs under 38 CFR 36.4306. VA then splits it by a single test: does the new loan amount exceed the payoff of the old one?
- The value ceiling is 100 percent. A VA cash-out loan must not exceed 100 percent of the reasonable value of the property. Any slice of the funding fee that would cross that line goes to cash at closing instead.
- 90 percent is a benefit test, not a limit. Landing at or under 90 percent of reasonable value is one of eight ways to pass the net tangible benefit test. Many summaries misread it as a cap.
- Seasoning is a later-of rule. A VA-to-VA refinance waits for the later of 210 days and the sixth monthly payment. However, the regulation and the statute start that 210-day count from different events, and the worked example below shows exactly where they split.
Can a VA streamline refinance cash out equity?
No. A VA streamline refinance cannot hand you cash at closing. The rule fits in one sentence of federal regulation. Under 38 CFR 36.4307(a)(4)(i), an Interest Rate Reduction Refinancing Loan may not exceed three items added together. Those items: the balance of the old loan, closing costs authorized by 38 CFR 36.4313(d), and a discount that tops out at 2 percent of the loan amount. Therefore the formula has no line for equity. VA describes the loan the same way on its IRRRL page. Its stated purposes are a lower rate, or a move from an adjustable rate to a fixed one.
Meanwhile the confusion makes sense, because the search phrase stitches two programs together. "Streamline" is VA's low-friction refinance of a loan VA already backs. "Cash out" is a different program. It carries its own regulation, its own appraisal, and its own paperwork. As a result, a question containing both words really has two answers. The rest of this guide gives you the second one.
What can a VA IRRRL actually roll into the new loan?
An IRRRL absorbs costs, never equity. Section 36.4307(a)(4) is a closed list, and it is short. Specifically, the new loan may include:
- the balance of the old loan, provided that loan is not delinquent;
- closing costs authorized by 38 CFR 36.4313(d);
- a discount of no more than 2 percent of the loan amount; and
- where the file adds energy efficient improvements, the extra amount authorized by 38 CFR 36.4339(a)(4).
VA also lets you finance the funding fee instead of paying it up front. Its funding fee page says so directly, and our VA funding fee chart carries the current percentages by loan type. In short, every item on that list is a cost of doing the refinance. None of them is money you walk away with.
What those costs add up to on the streamline side, fee by allowable fee, is its own subject. Our VA IRRRL closing costs guide prices a full illustrative fee sheet against the federal schedule.
What happens if the loan is behind
Delinquency changes the picture rather than ending it. Section 36.4307(a)(5) defines a delinquent loan simply. A scheduled monthly payment of principal and interest sits more than 30 days past due. In that situation VA can still back the refinance, but only with the Secretary's advance approval. Additionally, the lender must explain the cause of the deficiency. It must also show that the cause has been corrected, and qualify you under the credit standards in 38 CFR 36.4340. When VA approves such a file, the phrase "balance of the loan being refinanced" widens. It then takes in past due installments and allowable late charges.
Which VA refinance returns cash at closing?
The VA cash-out refinance is the only VA refinance that can put money in your hands. VA's cash-out refinance page gives it two jobs. First, taking cash out of your home equity. Second, moving a non-VA loan into the VA program. The rules sit at 38 U.S.C. 3710(a)(5) and 38 CFR 36.4306.
In practice it is a different animal from the streamline. Your lender orders an appraisal. You supply pay stubs for the most recent 30 days, plus W-2 forms for the previous two years. Many lenders add federal returns for those same two years. You also have to live in the home you refinance, which VA lists as an eligibility requirement. Meanwhile the lender owes you a formal disclosure package on two separate occasions, covered further down this page.
The name describes the program, not the outcome
One naming quirk trips up almost everyone. VA calls the whole program a cash-out refinance even when no cash comes out. Picture a veteran moving a conventional loan into the VA program at the same balance. In VA's vocabulary that veteran is doing a cash-out refinance. Nothing lands in their pocket. For the Nevada version of that file, see how a Nevada cash-out file moves from appraisal to closing on our VA site.
What is the difference between a Type I and a Type II VA cash-out?
One number decides it: the payoff amount of the loan you are replacing. VA's Loan Guaranty Service states the test in its quick reference document for cash-out refinances. A Type I cash-out lands at or under 100 percent of that payoff amount. A Type II goes past it. In other words, Type II is the one that reaches into equity.
VA's guaranty system writes the labels with Arabic numerals, as Type 1 and Type 2. Lenders and VA guidance more often write Type I and Type II. Both forms mean the same split, and this guide uses the Roman one throughout.
Which requirements attach to which type
The requirement set turns on two questions. Which type is it, and was the old loan already VA-backed? VA's quick reference lists four combinations, and the differences are real rather than cosmetic.
| Cash-out file | Seasoning certification | Fee recoupment certification | Net tangible benefit | Initial and final disclosures |
|---|---|---|---|---|
| Type I, VA to VA | Required | Required | At least one | Both required |
| Type I, non-VA to VA | Not listed | Not listed | At least one | Both required |
| Type II, VA to VA | Required | Not listed | At least one | Both required |
| Type II, non-VA to VA | Not listed | Not listed | At least one | Both required |
Notice the pattern. Seasoning attaches to VA-to-VA files, because it exists to stop rapid churning of loans VA already guarantees. Recoupment attaches only to Type I VA-to-VA files. There the loan is not growing, so the costs have to pay for themselves. Consequently a veteran moving a conventional loan into the VA program faces neither clock.
How the three routes compare: the loan itself
| Rule | IRRRL (streamline) | VA cash-out, Type I | VA cash-out, Type II |
|---|---|---|---|
| Governing rule | 38 CFR 36.4307, under 38 U.S.C. 3710(a)(8), (a)(9)(B)(i) and (a)(11) | 38 CFR 36.4306(a) and (b), under 38 U.S.C. 3710(a)(5) | 38 CFR 36.4306(a) and (c), under 38 U.S.C. 3710(a)(5) |
| Cash to the borrower | None. The cap is your balance, authorized closing costs, and a discount of up to 2 percent | None beyond the payoff. The new amount stays at or under 100 percent of that payoff | Yes. The new amount goes past the payoff of the old loan |
| Ceiling against value | No loan-to-value ceiling in 36.4307. The cap runs against the old balance instead | 100 percent of reasonable value (36.4306(a)(1)) | 100 percent of reasonable value (36.4306(a)(1)) |
| Occupancy | Own it and live there, or certify you once lived there, or qualify through a spouse during active duty (36.4307(a)(2)) | You will live in the home you refinance, per VA's eligibility list | You will live in the home you refinance, per VA's eligibility list |
| Entitlement | VA guarantees it without regard to entitlement available, and does not charge remaining entitlement (36.4307(b)) | Guaranty computed under 38 U.S.C. 3703 (36.4306(a)) | Guaranty computed under 38 U.S.C. 3703 (36.4306(a)) |
How the three routes compare: the tests and the paperwork
| Rule | IRRRL (streamline) | VA cash-out, Type I | VA cash-out, Type II |
|---|---|---|---|
| Benefit test | Lower monthly principal and interest, or a shorter term, or a fixed rate replacing a VA adjustable rate, or an energy improvement increase, or advance VA approval to head off imminent foreclosure (36.4307(a)(3)) | At least one of the eight net tangible benefit conditions in 36.4306(a)(3)(i) | At least one of the eight net tangible benefit conditions in 36.4306(a)(3)(i) |
| Seasoning gate | The later of six consecutive monthly payments and 210 days (38 U.S.C. 3709(c)) | The later of 210 days and the sixth monthly payment, where the old loan is VA-backed (36.4306(b)(2)) | The later of 210 days and the sixth monthly payment, and only where the old loan is VA-backed (36.4306(c)(2)) |
| Recoupment | Certified at 36 months or fewer, leaving out taxes, escrow, and chapter 37 fees (38 U.S.C. 3709(a)) | Certified at 36 months or fewer, on the same exclusions, where the old loan is VA-backed (36.4306(b)(1)) | No separate certification. The rule deems costs recouped once 36.4306(a) is met (36.4306(c)(1)) |
| Rate-drop floor | 50 basis points fixed to fixed, 200 basis points fixed to adjustable (38 U.S.C. 3709(b)) | The same 50 and 200 basis point floors, where the old loan is VA-backed (36.4306(b)(3) and (b)(4)) | None. Section 3709(d)(1) lifts subsections (a) through (c) for loans larger than the payoff |
| Disclosure package | Section 36.4307 asks for no cash-out comparison or equity disclosure | Loan comparison and home equity disclosure, twice: within 3 business days of application, then again at closing (36.4306(a)(3)(ii) to (iv)) | Loan comparison and home equity disclosure, twice: within 3 business days of application, then again at closing (36.4306(a)(3)(ii) to (iv)) |
How much of your home's value can a VA cash-out reach?
The ceiling is 100 percent of reasonable value. Section 36.4306(a)(1) puts it plainly. The new loan must not exceed 100 percent of the reasonable value of the dwelling securing it, as the Secretary determines that value. Reasonable value comes out of the VA appraisal, and your lender receives it on the Notice of Value. The Consumer Financial Protection Bureau describes the same reach in its explainer on VA loans. Veterans moving a non-VA mortgage into the VA program may qualify for up to 100 percent of the property's value.
Meanwhile the funding fee has its own rule inside that ceiling. Under 36.4306(a)(2) the fee may ride inside the new loan amount. However, any portion of it that would push the loan past 100 percent of reasonable value goes to cash at closing instead. So a file sitting right at the line does not get to finance the fee on top.
Why 90 percent is not the limit people think it is
Plenty of summaries report a 90 percent cap on VA cash-out loans. That figure is real, but it does a different job. Section 36.4306(a)(3)(i)(G) lists a new loan amount at or under 90 percent of reasonable value as one of eight ways to pass the net tangible benefit test. In other words, 90 percent is a way to pass a test. It is not a wall you cannot cross. A loan above it simply has to pass on one of the other seven grounds.
Not sure which of the three your file is?
Bring your current loan type, your balance, and what you want the refinance to do. A Las Vegas loan officer will tell you which program the rules put you in. You will also hear whether either one is worth doing right now. Ten minutes, no obligation.
Get your fast quoteWhat is the net tangible benefit test, and how do you pass it?
Every VA cash-out loan has to serve the borrower's financial interest, and the regulation says how to prove it. Section 36.4306(a)(3) puts the burden on the lender. It must give you a net tangible benefit test, and that test has to pass. Passing takes one condition, not all of them. Specifically, the new loan must do at least one of the following:
- end monthly mortgage insurance, whether public or private, or monthly guaranty insurance;
- run a shorter term than the old loan;
- carry a lower interest rate than the old loan;
- produce a lower payment than the old loan;
- raise your monthly residual income as explained by 38 CFR 36.4340(e);
- pay off an interim loan used to construct, alter, or repair the primary home;
- land at or under 90 percent of the reasonable value of the home; or
- replace an adjustable rate mortgage with a fixed rate loan.
Two of those deserve a second look. Ending mortgage insurance is often the whole reason a conventional borrower moves into the VA program, because VA loans carry none of it monthly. Likewise the adjustable-to-fixed route passes on stability grounds. Your new rate does not have to be lower for it.
The streamline uses a different, shorter test
An IRRRL does not run the eight-condition list. Instead 36.4307(a)(3) asks for one of five things:
- lower monthly principal and interest than the old loan;
- a shorter term than the old loan;
- fixed rate replacing a VA adjustable rate mortgage;
- an increase in the monthly payments caused by financed energy efficient improvements; or
- advance approval from the Secretary, where the refinance heads off imminent foreclosure.
On top of that, federal statute adds rate-drop floors of 50 and 200 basis points for VA-to-VA files. Our IRRRL guide walks those floors and the recoupment division step by step, so this page does not repeat them.
When can you close? The 210-day and sixth-payment rule, worked
A VA-to-VA refinance waits for two clocks, and the later one wins. Section 36.4306(b)(2) sets the rule for a Type I file. VA may not guarantee the new loan until the later of two dates. First, 210 days from the date of the first monthly payment the borrower made. Second, the date the sixth monthly payment is made. Section 36.4306(c)(2) applies the same later-of rule to a Type II file whenever the old loan is VA-backed. Here is what that looks like on a calendar.
Assume three things about the VA loan you want to refinance. Its first monthly payment fell due on 15 January. You made that payment on time, the same day. And the year is not a leap year.
Clock one, the payment count: payments land on 15 January, 15 February, 15 March, 15 April, 15 May and 15 June. The sixth monthly payment is made 15 June.
Clock two, the day count: 210 days after 15 January is 13 August.
The rule takes the later of the two, so the earliest guaranty date is 13 August.
In a leap year the same count lands on 12 August, because February adds a day. Dates are illustrative and are not a commitment to close on any schedule.
The trap: made, or due?
The two authorities start the 210-day count from different events, and the difference is easy to miss. The regulation counts from the first monthly payment made by the borrower. Federal statute counts from the first payment due date of the old loan, at 38 U.S.C. 3709(c)(2). Public Law 116-33, signed 25 July 2019, struck the older "made" wording out of the statute. Congress put the due-date wording in its place. The regulation still carries the earlier language, so the two texts no longer read alike.
When you pay on time the two readings agree, exactly as they do above. They separate when you do not. Suppose your first payment fell due 1 January and you made it on 15 January. The statutory clock then starts 1 January and runs out on 30 July. Meanwhile the regulation's clock starts 15 January and runs out on 13 August. That is a two-week gap on one loan. So ask your lender which date it certifies, and keep your payment history handy. Only your servicer can prove those dates.
What VA's own system checks
A third measurement is worth knowing about, because a lender actually types it into VA's guaranty system. VA's quick reference document tells lenders that seasoning certification applies to every cash-out refinance paying off an existing VA loan. The system then counts the days between two closings. It measures from the closing of the old loan to the closing of the new one, and it withholds the guaranty below 210. Therefore a file can satisfy the regulation on paper and still stop at the system check. The reverse happens too. Any competent VA lender runs all three dates before promising you a closing window.
What must your lender hand you, and when?
A VA cash-out file comes with a disclosure package the regulation spells out line by line. Section 36.4306(a)(3)(ii) sets out a comparison of the old loan and the new one. It covers six specific items:
- payoff amount of the new loan, set beside the payoff amount of the old one;
- type of the new loan, set beside the type of the old one;
- interest rate on the new loan, set beside the rate on the old one;
- term of the new loan, set beside the term remaining on the old one;
- total you will pay on each loan after every scheduled payment of principal, interest, and mortgage or guaranty insurance; and
- loan-to-value ratio of the old loan, set beside the ratio under the new one.
Section 36.4306(a)(3)(iii) adds a second disclosure that gets less attention and matters more. Your lender must estimate the dollar amount of home equity leaving the reasonable value of your home. It must also explain that losing that equity may affect your ability to sell later. In short, the regulation quietly names the real cost of a cash-out.
Twice, in writing, with your signature
Timing is fixed by 36.4306(a)(3)(iv). Your lender must deliver all of it in a standardized format on two separate occasions. The first comes no later than 3 business days from the date of the loan application. The second comes at loan closing. You then certify that you received the information both times. VA's quick reference reinforces the point from the other end. It withholds the guaranty on an application dated on or after 15 February 2019 unless both the initial and the final cash-out compliance disclosures sit in the file.
Does a cash-out use up entitlement when an IRRRL does not?
The streamline gets an explicit pass in the regulation. The cash-out does not. Section 36.4307(b) says VA may guarantee an IRRRL without regard to the entitlement available to the veteran. It also says the remaining entitlement carries no charge for that loan. VA guarantees the loan with the lesser of two figures. Those are the entitlement used on the old loan, and the amount calculated under 38 CFR 36.4302(a). Section 36.4307(a)(6) then caps the guaranty itself. It may not exceed the greater of the original guaranty amount on the old loan or 25 percent of the new one.
A cash-out refinance carries no equivalent language. Section 36.4306(a) simply runs the ordinary calculation, computing the guaranty under 38 U.S.C. 3703. In other words, only the streamline gets a written entitlement exemption. To see how entitlement is established in the first place, read our VA loan eligibility guide. It covers the Certificate of Eligibility and the restoration rules.
Can you use an IRRRL on a home you have moved out of?
Usually yes, and this is the clearest advantage the streamline holds over the cash-out. Section 36.4307(a)(2) gives three ways to satisfy occupancy. You own the home and live in it. Or you once lived in it and certify that fact in the form VA requires. Or, where active duty kept you away, your spouse lives there now or once did and certifies to it. VA states the same rule plainly on its IRRRL page. It asks you to certify that you currently live in the home, or used to.
The cash-out program reads differently. VA's eligibility list for a cash-out refinance says you will live in the home you refinance. As a result, a veteran who moved out and rented the property can often still streamline that loan. Pulling equity out of it through a VA cash-out is generally off the table.
Why this matters in Las Vegas
This distinction earns its keep here. Airmen stationed at Nellis Air Force Base buy in the valley, receive orders, and keep the house as a rental. Their VA loan follows the property. So the streamline stays available on it while the cash-out door closes. One caution from VA applies either way. If a second mortgage sits on the home, that holder has to agree to let the new VA loan take first position.
IRRRL or cash-out: which route fits your situation?
Match the goal to the program, and the choice usually makes itself. The list below is a starting point rather than an eligibility determination, because only a full file can settle that.
- You want money from the equity. That is a Type II cash-out, and it is the only VA route that produces it.
- You hold a VA loan, you want a lower rate, and you have moved out. The streamline is built for that, with the prior-occupancy certification.
- You hold a conventional or FHA loan and want into the VA program. That is a cash-out refinance. It is a Type I if the new amount stays at or under the payoff, and a Type II if it goes past.
- You want to stop paying monthly mortgage insurance. Ending it is the first condition on the net tangible benefit list, and VA loans carry no monthly mortgage insurance.
- You want out of an adjustable rate. Both programs treat the move to a fixed rate as a benefit in its own right.
Two more pages on this site pick up where this one stops. Our Las Vegas refinance guide covers the decision across every loan type. Our Nevada cash-out refinance guide covers the conventional and FHA versions of the same question. For the purchase side of the VA benefit, see VA loans in Las Vegas.
How we screen the question, and in what order
Valley West takeWe screen the equity question before the rate question, and that order matters. As a lender, we ask one thing first on a VA refinance: does the veteran want cash? That single answer decides which regulation the file lives under, and how long it will take. Veterans in this valley get streamline mailers promising both things at once. They cannot both be true on one loan. So bring your note, your latest statement, and a plain sentence about what you want the money to do. Sometimes the honest answer is that your current loan is the better one. We will say so, and we will put it in writing.
Get the rules applied to your actual loan.
Your seasoning dates, your benefit test, your disclosure timeline. A Las Vegas team that works VA files every week will check them. No obligation and no pressure, and a clear answer either way.
Get your fast quoteVA streamline and cash-out FAQ
Can a VA streamline refinance cash out equity?
No. A VA streamline refinance cannot return cash to you at closing. VA calls this loan an Interest Rate Reduction Refinancing Loan, or IRRRL. Under 38 CFR 36.4307(a)(4)(i) it stops at three items: your balance, closing costs authorized by 38 CFR 36.4313(d), and a discount of up to 2 percent. Nothing on that list is money you walk away with. To reach equity you need VA's separate cash-out refinance, governed by 38 CFR 36.4306.
Which VA refinance actually returns cash at closing?
The VA cash-out refinance. VA describes it as the loan that lets you take cash out of your equity, or move a non-VA loan into the VA program. It requires an appraisal, full credit and income underwriting, and a disclosure package delivered twice. VA then sorts these loans into Type I and Type II. Only a Type II produces cash, because its new amount goes past the payoff of the loan it replaces.
What is the difference between a Type I and a Type II VA cash-out refinance?
One number. VA's Loan Guaranty Service defines a Type 1 cash-out as a loan at or under 100 percent of the payoff amount of the old loan. A Type 2 goes past that payoff. The requirement sets differ too. A Type I paying off an existing VA loan needs both a seasoning certification and a fee recoupment certification. A Type II paying off a VA loan needs the seasoning certification only. Neither type carries those certifications when the old loan is not VA-backed.
How far the cash-out reaches, and when
How much of my home's value can a VA cash-out refinance reach?
Up to 100 percent of the reasonable value of the property, per 38 CFR 36.4306(a)(1). Reasonable value is the figure VA's appraisal produces. The funding fee can ride inside that ceiling. However, any part of the fee that would push the loan past 100 percent of reasonable value goes to cash at closing. The 90 percent figure in many summaries is not a cap. It is one of eight ways to pass the net tangible benefit test.
How long do I have to wait before a VA refinance can be guaranteed?
For a refinance of a loan VA already backs, the wait runs to the later of two dates. Those are 210 days, and the date the sixth monthly payment is made. Watch the starting event, because the authorities differ. 38 CFR 36.4306(b)(2) counts 210 days from the first monthly payment made by the borrower. 38 U.S.C. 3709(c)(2) counts from the first payment due date of the old loan. Public Law 116-33 replaced the older wording in the statute in July 2019, and the regulation still carries it. So ask your lender which date it certifies.
Can I get a VA cash-out refinance on a home I no longer live in?
Generally no. VA lists living in the home you refinance as an eligibility requirement for a cash-out refinance. An IRRRL is different. Section 36.4307(a)(2) lets you qualify by certifying that you once occupied the home. VA's own IRRRL page asks you to certify that you currently live in it, or used to. So a veteran who received orders and rented the property can often still streamline that loan, while the cash-out route stays closed.
Occupancy, entitlement, and the paperwork
Does an IRRRL use up my VA entitlement?
No, and the regulation says so directly. Section 36.4307(b) lets VA guarantee an IRRRL without regard to the entitlement available to the veteran. It also leaves remaining entitlement uncharged. VA guarantees the loan with the lesser of two figures: the entitlement used on the old loan, or the amount calculated under 38 CFR 36.4302(a). A cash-out refinance has no equivalent provision. It runs the ordinary calculation under 38 U.S.C. 3703.
What must a VA cash-out lender disclose to me, and when?
Two things, on two occasions. Section 36.4306(a)(3)(ii) requires a comparison of the old loan and the new one across six items. Those are payoff amount, loan type, interest rate, term, total scheduled payments, and loan-to-value ratio. Section 36.4306(a)(3)(iii) then requires an estimate of the home equity leaving the reasonable value of your home, plus an explanation that losing it may affect your ability to sell later. Both go out in a standardized format no later than 3 business days from application, and again at closing. You certify receipt each time.
The bottom line
A VA streamline refinance cannot cash out equity, and the reason is structural. It is not a matter of lender policy. Federal regulation caps the loan at the old balance, authorized closing costs, and a discount of up to 2 percent. Nothing is left over. Meanwhile the VA cash-out refinance is the program that reaches equity. VA sorts it into Type I and Type II by one question: does the new amount pass the payoff of the loan it replaces?
Everything else follows from that split. The cash-out brings an appraisal, a 100 percent value ceiling, an eight-condition benefit test, and a disclosure package delivered twice. The streamline brings a seasoning clock, a recoupment fence, statutory rate-drop floors, and a generous occupancy rule. That rule even covers a house you no longer live in. Finally, remember that only your file settles which one you qualify for. Rules decide the shape of the answer, and your numbers decide the rest.
Sources
- 38 CFR 36.4307, Interest rate reduction refinancing loan: ecfr.gov. Read for the loan-amount cap, the three occupancy paths, the benefit test, the 25 percent guaranty ceiling, the entitlement rule, and the delinquency exception.
- 38 CFR 36.4306, Refinancing of mortgage or other lien indebtedness: ecfr.gov. Read for the 100 percent value ceiling, the funding fee rule, the eight benefit conditions, the two disclosures, recoupment at 36 months, seasoning, and the 50 and 200 basis point floors.
- 38 U.S.C. 3709, Refinancing of housing loans: govinfo.gov. Read for fee recoupment, the benefit floors, seasoning from the first payment due date, the cash-out carve-out at subsection (d), and the amendment note for Public Law 116-33.
Agency guidance
- Department of Veterans Affairs, Cash-Out Refinance Loan: va.gov. Eligibility including occupancy, the two purposes, appraisal and income documents. Page last updated January 7, 2026.
- Department of Veterans Affairs, Interest Rate Reduction Refinance Loan: va.gov. The VA-to-VA rule, the live-or-lived-there certification, second mortgage subordination, and financing costs. Page last updated January 7, 2026.
- Department of Veterans Affairs, VA funding fee and loan closing costs: va.gov. Financing the fee, who is exempt, and the rate charts effective April 7, 2023.
- VA Loan Guaranty Service, Quick Reference Document for Cash-Out Refinances: benefits.va.gov (PDF). Type 1 and Type 2 definitions, the four requirement sets, the 210-day system check, and the compliance disclosures.
- Consumer Financial Protection Bureau, What is a VA loan?: consumerfinance.gov. Refinancing a non-VA mortgage up to 100 percent of value, and the point that private lenders underwrite, close, and service VA loans.
Across Valley West: Working a VA file in Nevada? The veteran-lending reference we run alongside this blog covers the program on its own, from first-use purchases through both refinance routes.
Keep reading
- VA LoansThe VA IRRRL, in fullRecoupment math, the rate-drop floors, and the three tests.
- RefinanceCash-out refinance in NevadaWhat comes out, and what taking it actually costs.
- VA LoansVA loan eligibility and your COEService-era rules, entitlement math, and restoration.
- VA LoansThe VA funding fee chartCurrent percentages by loan type, and who pays none.
What is in this first edition
Published: August 20, 2026. We read every rule on this page from its own primary source on the day of publication.
- Read verbatim: 38 CFR 36.4306 and 38 CFR 36.4307 from the current eCFR, plus 38 U.S.C. 3709 from govinfo, including its amendment note for Public Law 116-33.
- Reconciled the seasoning conflict instead of papering over it. The regulation counts 210 days from the first payment made. The statute counts from the first payment due date, and Congress made that change in July 2019.
- Sourced the Type I and Type II definitions to VA's current Loan Guaranty Service quick reference document. We did not lean on the 2019 circular that first named them, because VA rescinded it in 2021.
- Separated the 90 percent benefit condition from the 100 percent value ceiling. Summaries routinely report the first as if it were the second.
- Checked funding fee treatment on both programs against VA's own funding fee page.
- Checked every occupancy statement against both the regulation and VA's public eligibility lists.
