Seasoning
When refinancing a VA loan, the loan being refinanced must have six consecutive monthly payments made and 210 days since the first payment due date.
Recoupment
For Type I cash-outs, VA requires that fees and closing costs be recouped within 36 months. Type II cash-outs are not subject to the same recoupment test, but net tangible benefit applies.
The timing and benefit tests VA applies to cash-out refinances of existing VA loans.
Funding fee
The cash-out funding fee is 2.15 percent of the loan for first use and 3.3 percent after first use, unless exempt.
Occupancy
You must occupy the home at the time of the refinance.
Disclosures
Lenders must give you a comparison disclosure showing payments and costs.
Official source
See VA's cash-out refinance page for current requirements.
Exemptions and refunds
Veterans receiving VA compensation for a service-connected disability, surviving spouses receiving Dependency and Indemnity Compensation, and certain active-duty Purple Heart recipients are exempt from the funding fee. If you are later awarded compensation retroactive to before closing, you may be eligible for a refund by contacting your VA regional loan center. Keep your Closing Disclosure, which shows the fee paid, in case you need to request one later, along with your Certificate of Eligibility and any VA award letter.
Sources
Sources checked 10/23/2026. General education only; confirm current rules with official sources and a licensed lender.