source:
  type: regulation
  id: va-38usc-3709
  authority: 38 U.S.C. §3709 — Refinancing of housing loans
  description: '38 U.S.C. §3709 sets the statutory eligibility conditions for VA

    refinance loans (other than cash-out, which is governed by §3709(d)).

    Three operative tests: (a) Fee Recoupment — 36-month recoupment via

    lower regular monthly payments with issuer certification; (b) Net

    Tangible Benefit — fixed-to-fixed 50 bp drop / fixed-to-ARM 200 bp

    drop / discount-point-financing limits; (c) Loan Seasoning — the

    later of 6 consecutive monthly payments OR 210 days after the first

    payment due date on the loan being refinanced.

    '
obligations:
- id: va-38usc-3709-a
  canonical_id: va-38usc-3709-a
  section: 38 U.S.C. §3709(a)
  description: '(a): (a) Fee Recoupment.— Except as provided in subsection (d) and notwithstanding section
    3703 of this title or any other provision of law, a loan to a veteran for a purpose specified in section
    3710 of this title that is being refinanced may not be guaranteed or insured under this chapter unless—
    (1) t…'
  type: dont
  tags:
  - regulator-direct
  - section-complete
  - usc-statute
  primary_source:
    tier: 1
    authority: 38 U.S.C. §3709(a)
    source_class: va-statute
    source_url: https://www.law.cornell.edu/uscode/text/38/3709
    snapshot_id: 5e5d55bc2bb93676
    fetched_at: '2026-05-24T19:34:35Z'
    content_hash: sha256:8cf65269a81e887c0518c8f3fcd74e48175160b127bc8cacc8b1a9fca455199c
    paragraph_quote: (a) Fee Recoupment.— Except as provided in subsection (d) and notwithstanding section
      3703 of this title or any other provision of law, a loan to a veteran for a purpose specified in
      section 3710 of this title that is being refinanced may not be guaranteed or insured under this
      chapter unless— (1) the issuer of the refinanced loan provides the Secretary with a certification
      of the recoupment period for fees, closing costs, and any expenses (other than taxes, amounts held
      in escrow, and fees paid under this chapter) that would be incurred by the borrower in the refinancing
      of the loan; (2) all of the fees and incurred costs are scheduled to be recouped on or before the
      date that is 36 months after the date of loan issuance; and (3) the recoupment is calculated through
      lower regular monthly payments (other than taxes, amounts held in escrow, and fees paid under this
      chapter) as a result of the refinanced loan.
    drafter_attestation: Verbatim subsection of 38 U.S.C. §3709 from Cornell LII snapshot 5e5d55bc2bb93676;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: va-38usc-3709-b
  canonical_id: va-38usc-3709-b
  section: 38 U.S.C. §3709(b)
  description: '(b): (b) Net Tangible Benefit Test.— Except as provided in subsection (d) and notwithstanding
    section 3703 of this title or any other provision of law, a loan to a veteran for a purpose specified
    in section 3710 of this title that is refinanced may not be guaranteed or insured under this chapter
    unless— …'
  type: dont
  tags:
  - regulator-direct
  - section-complete
  - usc-statute
  primary_source:
    tier: 1
    authority: 38 U.S.C. §3709(a)
    source_class: va-statute
    source_url: https://www.law.cornell.edu/uscode/text/38/3709
    snapshot_id: 5e5d55bc2bb93676
    fetched_at: '2026-05-24T19:34:35Z'
    content_hash: sha256:8cf65269a81e887c0518c8f3fcd74e48175160b127bc8cacc8b1a9fca455199c
    paragraph_quote: (b) Net Tangible Benefit Test.— Except as provided in subsection (d) and notwithstanding
      section 3703 of this title or any other provision of law, a loan to a veteran for a purpose specified
      in section 3710 of this title that is refinanced may not be guaranteed or insured under this chapter
      unless— (1) the issuer of the refinanced loan provides the borrower with a net tangible benefit
      test; (2) in a case in which the original loan had a fixed rate mortgage interest rate and the refinanced
      loan will have a fixed rate mortgage interest rate, the refinanced loan has a mortgage interest
      rate that is not less than 50 basis points less than the previous loan; (3) in a case in which the
      original loan had a fixed rate mortgage interest rate and the refinanced loan will have an adjustable
      rate mortgage interest rate, the refinanced loan has a mortgage interest rate that is not less than
      200 basis points less than the previous loan; and (4) the lower interest rate is not produced solely
      from discount points, unless— (A) such points are paid at closing; and (B) such points are not added
      to the principal loan amount, unless—
    drafter_attestation: Verbatim subsection of 38 U.S.C. §3709 from Cornell LII snapshot 5e5d55bc2bb93676;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: va-38usc-3709-i
  canonical_id: va-38usc-3709-i
  section: 38 U.S.C. §3709(i)
  description: '(i): (i) for discount point amounts that are less than or equal to one discount point,
    the resulting loan balance after any fees and expenses allows the property with respect to which the
    loan was issued to maintain a loan to value ratio of 100 percent or less; and (ii) for discount point
    amounts that ar…'
  type: do
  tags:
  - regulator-direct
  - section-complete
  - usc-statute
  primary_source:
    tier: 1
    authority: 38 U.S.C. §3709(a)
    source_class: va-statute
    source_url: https://www.law.cornell.edu/uscode/text/38/3709
    snapshot_id: 5e5d55bc2bb93676
    fetched_at: '2026-05-24T19:34:35Z'
    content_hash: sha256:8cf65269a81e887c0518c8f3fcd74e48175160b127bc8cacc8b1a9fca455199c
    paragraph_quote: (i) for discount point amounts that are less than or equal to one discount point,
      the resulting loan balance after any fees and expenses allows the property with respect to which
      the loan was issued to maintain a loan to value ratio of 100 percent or less; and (ii) for discount
      point amounts that are greater than one discount point, the resulting loan balance after any fees
      and expenses allows the property with respect to which the loan was issued to maintain a loan to
      value ratio of 90 percent or less.
    drafter_attestation: Verbatim subsection of 38 U.S.C. §3709 from Cornell LII snapshot 5e5d55bc2bb93676;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: va-38usc-3709-c
  canonical_id: va-38usc-3709-c
  section: 38 U.S.C. §3709(c)
  description: '(c): (c) Loan Seasoning.— Except as provided in subsection (d) and notwithstanding section
    3703 of this title or any other provision of law, a loan to a veteran for a purpose specified in section
    3710 of this title that is a refinance may not be guaranteed or insured under this chapter until the
    date tha…'
  type: dont
  tags:
  - regulator-direct
  - section-complete
  - usc-statute
  primary_source:
    tier: 1
    authority: 38 U.S.C. §3709(a)
    source_class: va-statute
    source_url: https://www.law.cornell.edu/uscode/text/38/3709
    snapshot_id: 5e5d55bc2bb93676
    fetched_at: '2026-05-24T19:34:35Z'
    content_hash: sha256:8cf65269a81e887c0518c8f3fcd74e48175160b127bc8cacc8b1a9fca455199c
    paragraph_quote: (c) Loan Seasoning.— Except as provided in subsection (d) and notwithstanding section
      3703 of this title or any other provision of law, a loan to a veteran for a purpose specified in
      section 3710 of this title that is a refinance may not be guaranteed or insured under this chapter
      until the date that is the later of— (1) the date on which the borrower has made at least six consecutive
      monthly payments on the loan being refinanced; and (2) the date that is 210 days after the first
      payment due date of the loan being refinanced.
    drafter_attestation: Verbatim subsection of 38 U.S.C. §3709 from Cornell LII snapshot 5e5d55bc2bb93676;
      body isolated between nav and notes; substring-verified.
  judgment: false
- id: va-38usc-3709-d
  canonical_id: va-38usc-3709-d
  section: 38 U.S.C. §3709(d)
  description: '(d): (d) Cash-out Refinances.— (1) Subsections (a) through (c) shall not apply in a case
    of a loan refinancing in which the amount of the principal for the new loan to be guaranteed or insured
    under this chapter is larger than the payoff amount of the refinanced loan. (2) Not later than 180
    days after th…'
  type: dont
  tags:
  - regulator-direct
  - section-complete
  - usc-statute
  primary_source:
    tier: 1
    authority: 38 U.S.C. §3709(a)
    source_class: va-statute
    source_url: https://www.law.cornell.edu/uscode/text/38/3709
    snapshot_id: 5e5d55bc2bb93676
    fetched_at: '2026-05-24T19:34:35Z'
    content_hash: sha256:8cf65269a81e887c0518c8f3fcd74e48175160b127bc8cacc8b1a9fca455199c
    paragraph_quote: (d) Cash-out Refinances.— (1) Subsections (a) through (c) shall not apply in a case
      of a loan refinancing in which the amount of the principal for the new loan to be guaranteed or
      insured under this chapter is larger than the payoff amount of the refinanced loan. (2) Not later
      than 180 days after the date of the enactment of this section, the Secretary shall promulgate such
      rules as the Secretary considers appropriate with respect to refinancing described in paragraph
      (1) to ensure that such refinancing is in the financial interest of the borrower, including rules
      relating to recoupment, seasoning, and net tangible benefits. (Added Pub. L. 115–174, title III,
      § 309(a)(1) , May 24, 2018 , 132 Stat. 1348 ; amended Pub. L. 116–33, § 2(b) , July 25, 2019 , 133
      Stat. 1038 .)
    drafter_attestation: Verbatim subsection of 38 U.S.C. §3709 from Cornell LII snapshot 5e5d55bc2bb93676;
      body isolated between nav and notes; substring-verified.
  judgment: false
