VA Cash-Out Refinance
VA cash-out can do something an IRRRL cannot: refinance a non-VA loan into a VA-backed mortgage and, when eligible, extract equity.
Two common uses
A VA cash-out refinance can take equity out for needs such as debt payoff, education or improvements, or refinance an existing non-VA mortgage into a VA-backed loan.
Occupancy required
The borrower generally must live in the home being refinanced and satisfy VA credit, income, COE and lender requirements.
Appraisal required
The lender orders a VA appraisal because the new loan must be supported by the property and VA's collateral requirements.
Funding fee
Current VA cash-out funding-fee rates are 2.15% for first use and 3.3% after first use unless the borrower is exempt.
Official VA baseline
VA Home Loans · VA Pamphlet 26-7 Lender's Handbook
VA sets the guaranty program rules, while private lenders underwrite and may impose overlays that are stricter than VA's baseline.