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Page 1 of 2 WHAT IS A VA CASH-OUT REFINANCING LOAN?  A VA cash-out refinancing loan is a VA-guaranteed loan which refinances any type of lien or liens against the secured property. The liens to be paid off may be
VA Loan proceeds beyond the amount needed to pay off the lien(s) may be taken as cash by the borrower for any purpose acceptable to the lender.
A VA cash-out refinancing loan is limited to 90 percent of the reasonable value of the property.
The VA loan must be secured by a first lien on the property.
VA Limits a Cash Out Refinance to the following:
- 90 percent of the VA reasonable value, plus
- the cost of any energy efficiency improvements up to $6,000, plus
- VA funding fee.
WHAT FEES AND CHARGES CAN BE INCLUDED IN THE LOAN?
While only the VA funding fee can be added to the 90 percent limit to increase the loan amount, cash proceeds from the loan may be used to pay VA allowable fees and charges and discount points.
The total of the following items, if paid from loan proceeds, cannot exceed 90 percent of reasonable value:
- Payoff of liens
- allowable fees and charges (other than the funding fee)
- reasonable discount points, and
- cash to the borrower.
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