source:
  type: guide
  id: va-m26-7-ch06-t03
  authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 6, Topic 3 — Cash-Out
    Refinancing Loans
  description: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 6, Topic 3 — Cash-Out
    Refinancing Loans.
  coverage_tier: operative
obligations:
- id: va-m26-7-ch06-t03-full
  canonical_id: va-m26-7-ch06-t03-full
  section: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 6, Topic 3 — Cash-Out Refinancing
    Loans
  type: do
  tags:
  - regulator-direct
  - va
  - va-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 6, Topic 3 — Cash-Out
      Refinancing Loans
    source_class: va-handbook
    source_url: https://www.benefits.va.gov/warms/pam26_7.asp
    snapshot_id: e9c94ae5dc0a61f0
    fetched_at: '2026-05-23T01:53:53Z'
    content_hash: sha256:3cffeec90efad00b76c2984956a10f10bd9f0b99880c94bd3c269192cfe674f5
    paragraph_quote: '3. Cash-Out Refinancing Loans Change Date April 10, 2009, Change
      11 • Subsections a, b, and c were changed to remove references to a 90 percent
      limit on refinancing. P.L. 110-389, Veterans’ Benefits Improvement Act of 2008,
      signed October 10, 2008, removed this limit. • Subsection b has been changed
      to state that refinances can now be made up to 100 percent of value, plus funding
      fee and any energy efficient improvements. • Subsection d has been changed to
      remove the $36,000 maximum guaranty limit on most refinance loans. • This section
      has been updated to correct hyperlinks and to make minor grammatical edits.
      a. What is a VA Cash-Out Refinancing Loan? A cash-out refinancing loan is a
      VA-guaranteed loan that refinances any type of lien or liens against the secured
      property. The liens to be paid off may be: • current or delinquent, and • from
      any source, such as - tax or judgment liens, or - VA, FHA, or conventional mortgages.
      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. The loan must
      be secured by a first lien on the property. b. Maximum Loan Amount The maximum
      loan amount is 100 percent of the appraised value, plus the cost of any energy
      efficiency improvements, plus the VA funding fee. c. What Fees and Charges Can
      be Included in the Loan? Cash proceeds from the loan may be used to pay allowable
      fees and charges and discount points. Continued on next page VA Pamphlet 26-7,
      Revised Chapter 6: Refinancing Loans 6-18 3. Cash-Out Refinancing Loans, Continued
      d. Maximum Guaranty The maximum guaranty for regular (i.e., “cash-out”) refinancing
      loans is the same as the maximum guaranty for purchase loans. Prior to October
      10, 2008, the maximum guaranty had been limited to $36,000. However, guaranty
      on this type of loan is now computed the same as for purchases (i.e., can vary
      depending on location). e. Veteran’s Entitlement The veteran must have sufficient
      available entitlement for the loan. If an existing VA loan on the same property
      will be paid off by the refinancing loan, the entitlement used for that existing
      loan can be restored for purposes of obtaining the new loan. f. Occupancy The
      veteran must certify that he or she intends to personally occupy the property
      as his or her home. Reference: See section 5 of chapter 3 for details. g. Automatic
      or Prior Approval Processing Only lenders with authority to close loans automatically
      may close cash-out refinancing loans automatically. All others must submit these
      loans for prior approval by VA. h. Lender Procedures Loan processing procedures
      are virtually the same as for non-refinancing loans. A full appraisal, credit
      information, and underwriting are required. Generally, follow the procedures
      described in chapter 5 of this handbook. To report loan closing, submit all
      of the documents required for non- refinancing loans (see chapter 5) plus a
      statement signed by the veteran which shows: • the cash proceeds paid, • an
      itemization of the debts paid from loan proceeds, and • the identification of
      those debts secured by liens of record. VA Pamphlet 26-7, Revised Chapter 6:
      Refinancing Loans 6-19'
  judgment: false
